According to the latest official government figures, construction of private houses and commercial development work output prices rose dramatically in the second quarter as pressures on the supply chain including materials and labour began to hit home.


Prices for commercial construction work are now running at something in the region of 9% above the same period of 2013 and have increased 2.5% quarter on quarter.


Pressures on the supply chain have resulted in the sharpest rises in prices since the credit crunch and are largely being driven upwards by London’s booming office market as well as the emphasis on private house building as materials become scarce.


It’s estimated that housing costs have increased by around 7% since the same time in 2013 and have risen 2% quarter on quarter.


The two construction sectors have significantly contributed to the overall increase of construction which has grown by 1.15% but with slow growth in other areas it’s fair to say there’s still some way to go before construction is out of the woods, and a rebalance in the distribution of construction is still required to create a sustainable marketplace.

 

For more information view the Quarterly Construction Price and Cost Indices.