Increase in construction costs by 3.7% reported
In the recent data unveiled by the statistics office, there's been a notable surge in labor costs climbing 6.8% year-on-year, slipping by 0.6 percentage points compared to March. On a different note, material prices experienced a spike, rising 1.2%, with a faster pace compared to the 1% increase witnessed in the previous month.
The IBGE insightfully revealed that labor costs contributed three percentage points (down from 3.3 in the previous month) to the annual variation rate of the New Home Construction Cost Index, while materials chipped in with 0.7 percentage points (up from 0.5 in March).
ocation, glass and mirrors, which skyrocketed by about 20%, were the materials that significantly impacted the overall price rise, followed closely by coating, insulation and waterproofing materials, and sanitary ware, each recording an approximately 10% increase.
Contrastingly, wood and wood derivatives, and mild steel along with galvanized sheet metal registered a nearly 10% drop compared to the same period last year.
In the side-by-side comparison, the construction cost variation stood at 0.6% in April, showing an increase of 0.2 percentage points compared to the preceding month. The rise in material costs amounted to 0.6%, and labor costs climbed 0.7%.
The economic landscape, tariff fluctuations, and trade tensions exert a significant influence on the construction industry, with builders grappling to establish home prices given the erratic material costs that can impact overall construction costs. Meanwhile, specific data pertaining to labor cost changes in April 2025 may not be abundant in the current sources.
Among various materials, insulation and waterproofing materials prices could be affected by production costs, demand, and material availability. Sanitary ware falls into the same category, unsusceptible to supply chain disruptions and tariffs on imported goods.
On a broader scale, the Producer Price Index (PPI) for final demand services witnessed a 0.7% decrease in April, suggesting potential economic deceleration affecting construction material prices.
Regional differences in construction activity, such as the Northeast region leading the way with a 12.9% surge in housing starts compared to other areas, can also impact local material and labor costs. In sum, while specific price data for materials like glass, mirrors, coating, insulation, waterproofing materials, and sanitary ware in April 2025 may be scarce, economic uncertainty and the volatility in material costs are crucial factors impacting the cost of new home construction across the board.
The Producer Price Index (PPI) for final demand services might influence the financial aspect of the construction industry, especially if it shows a potential economic deceleration affecting construction material prices. In Portugal, regional differences in construction activity, such as the Northeast region, might cause variations in local material and labor costs, contributing to the overall cost of new home construction.
