The latest data from the Cyprus Statistical Service indicates that the Producer Price Index for Construction reached 119.82% in the second quarter of 2024 (2015 basis = 100.00). This represents an increase of 1.1% compared to the first quarter of 2024 and 5.3% compared to the same quarter of 2023.
When analysed by project type, the Index demonstrated an increase of 1.4% for commercial buildings and 6.9% for civil engineering projects. Consequently, the Construction Producer Price Index exhibited a 4.6% growth from January to June 2024 in comparison to the same period in 2023. For commercial buildings, the Index displayed an increase of 1.6%, while for civil construction projects, it reached 16.6%.
It should be noted that the Producer Price Index represents a measure of the average level of change in the wholesale prices of raw materials, inputs and intermediate consumption goods at which domestic producers sell their goods.
The Producer Price Index encompasses all stages of production, including raw materials, intermediate stages, finished goods, and all sectors. The primary distinction between this index and the consumer price index is that the former covers only goods and not services, and at the wholesale level of their realisation. An increase in the Producer Price Index could potentially signal another rise in property prices.
Additionally, Statistics Cyprus observed that during the second quarter of 2024, the Construction Production Index reached 119.80 units (on a 2015 basis = 100.00), representing a 4.8% increase compared to the same period in 2023.
In terms of project type, the Index for commercial buildings exhibited an 8.4% increase, while civil engineering projects demonstrated a 14.6% growth in the second quarter of 2024 when compared to the corresponding quarter of 2023. In conclusion, the Construction Index demonstrated a 4.7% increase from January to June 2024. For commercial buildings, the Index exhibited an 8.3% growth over the year, while the Index for civil engineering projects exhibited a 3.1% increase.
The quarterly Construction Production Index serves as a monitoring tool for short-term fluctuations in construction activity. It is a volume indicator that approximates changes in value added at constant prices, thereby providing insight into the growth trajectory of the construction sector.