In April, the construction cost index in Austria fell by minus 1.9 percent compared to the same point in the previous year. The Vorarlberg construction guild sees this as a clear sign of a trend reversal.
By Günther Bitschnau (wpa)
In April 2023, the construction cost index for residential and settlement construction in Austria was 1.9 percent below the April value of the previous year and thus fell significantly. Statistics Austria provided information on the development of this indicator as part of the monthly report. In road construction, the costs have fallen by 0.9 percent within a year and in bridge construction by 6.6 percent. Only in domestic water engineering was there a plus of one percent.
Significant change
The current decline in the construction cost index for residential and housing estates may be a trend-setting indicator with regard to the further development of construction costs. In the recent past, the index actually only knew one direction: upwards. In the previous year, the construction cost index in Austria increased by 10.1 percent compared to 2021 in the area of residential and settlement construction. Even in January 2023 it was still plus 5.6 percent and in February still plus 5.3 percent. In March 2023, it was only 0.5 percent more than at the same time last year. And now minus 1.9 percent.
Stroppa: “That should be the trend reversal”
Alexander Stroppa, deputy guild master of the Vorarlberg construction guild, said when asked by wpa that a trend reversal in construction costs is now likely to be seen here. “The question is how sustainable and how strong this will continue. In addition, you have to see the declines in relation to the increases in recent months.” In any case, this development is not particularly surprising, since the number of new residential construction projects in Austria, but also in Vorarlberg, has fallen massively since late summer 2022.
One man’s meat is another man’s suffering
According to Stroppa, falling costs and thus falling prices in the residential construction sector would understandably make buyers happy. However, there is always another side and that is the construction companies and their employees. “When residential construction falls massively, the construction companies push into other areas because they have to employ and pay their construction crews. Then the pressure increases there too.” This should be felt in broad circles of the Vorarlberg construction industry by 2024 at the latest.
(Source: Business Press Agency)
