Construction costs up, up, and away

Further to our previous article reporting that construction costs are accelerating at the fastest pace since the mid-2000s, Business Day reports that by the end of next year, construction costs in Christchurch will have risen another 7.1%, compared to a rise of 5.6% in Auckland and 4.1% in Wellington.

Rider Levett Bucknall attributes most of the cost increase to labour cost inflation, but also notes an increase in subcontractor and supplier margins as well as increasing tender prices on major projects.

Being driven by the rebuild, these increases should abate as works are progressively completed, with an expectation that this cost growth in Christchurch will slow to 5.3% by 2018 (although notably, this percentage is still higher than the current trajectory of construction cost growth in Wellington).

For further information on the report, including comments from Rider Levett Bucknall director Richard Anderson, see the following article: Labour costs fuel rising construction bills

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