As from August 2020, central government only compensates employers for sick pay costs that are considered higher than normal. Between April and June, the temporary reduction in employers’ costs had a considerable downward effect on construction costs, and the central government compensation to employers for sick pay costs had a similar effect between June and July. In addition, negotiations on new collective agreements were postponed. Wages and salaries account for about 40 percent of the Construction Cost Index.

Developments between August and September 2020

The Construction Cost Index for multi-dwelling buildings decreased by 0.2 percent in September 2020 compared with August 2020. In the corresponding period in 2019, the Construction Cost Index remained unchanged compared with the previous month. Contractors’ costs, which account for more than 82 percent of the Construction Cost Index, also decreased by 0.2 percent between August and September 2020.

Contractors’ costs in the group ‘transport, fuel and electricity’ fell by 0.6 percent. This was mainly because the cost of diesel oil fell by 3.0 percent compared with August. Machinery costs and contractors’ other costs decreased by 1.0 percent and 0.1 percent respectively. Contractors’ wage costs remained unchanged.

Costs in the group ‘building materials’ fell by 0.2 percent. All costs in building material groups decreased or remained unchanged, with the exception of the cost of concrete, which increased. The largest decrease was in the cost of other building materials, woodwork and white goods.

Over the past month, investor costs, which consist of interest and credit costs, costs for plans, and central administration, decreased by 0.1 percent.

Developments between September 2019 and September 2020

The Construction Cost Index for multi-dwelling buildings increased by 0.4 percent between September 2019 and September 2020. The corresponding change was an increase of 3.3 percent between September 2018 and September 2019.

Investor costs increased by 3.2 percent between September 2019 and September 2020, which led to an increase of 0.6 percentage points for the total index in the same period. This increase was mainly due to higher interest costs. These cost increases were offset by lower contractors’ costs, which fell by 0.2 percent and led to a decrease of 0.2 percentage points for the total index in the same period.

Contractors’ costs in the group ‘transport, fuel and electricity’ decreased by 5.8 percent between September 2019 and September 2020. Costs of machinery decreased by 0.5 percent, while contractors’ other costs increased by 0.2 percent. Contractors’ costs for wages and salaries remained unchanged. In the spring of 2020, collective agreements were prolonged and negotiations were postponed until October.

Contractors’ costs of building materials increased by 0.2 percent in September on an annual basis. White goods and material for painting accounted for the largest price increase in the building materials group.