Cost update Q3 2018

Cost update index image

A quarterly analysis of changes to the main construction cost indices, material prices and labour costs shows continuing upward movement

01 / Key changes

Building cost index

A composite measure of building costs increased by 5.0% over the previous 12 months. Both labour and materials costs pushed higher, which maintains inflationary pressures for input costs. The prolonged weakness in sterling against the euro and the dollar has propelled the cost of imported materials and components, particularly with dollar-priced commodities. General underlying construction industry demand also supports the cost trends.

Mechanical cost index

The mechanical cost index rose 4.1% in the year to Q3 2018 – a marginal fall from 4.4% in Q2 2018. The labour and materials index components rose further over the year, but these inflationary pressures are easing slightly.

Electrical cost index

Aecom’s electrical cost index increased by 3.6% over the year to Q3 2018. Global metals commodity price rises are beginning to fade, but this has not yet fed through into the index’s latest readings because of the lagged effect as higher costs work their way through the whole supply chain.

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