According to new data from the Statistical Service of Cyprus, the Producer Price Index in construction reached 123.7 points in the first quarter of 2025 (based on 2015 = 100.00). This represents an increase of 1.3% compared to the fourth quarter of 2024, and a rise of 4.4% compared to the same quarter of 2024.
The index rose by 9.1% for commercial buildings and by 18.1% for civil engineering projects. The increase in producer prices indicates a rise in the cost of materials and services in the sector, which could be reflected in the final sales prices of real estate and construction projects.
It should be noted that the Producer Price Index indicates the average change in wholesale prices for raw materials, materials, and intermediate goods sold by domestic producers.
The index covers all stages of production, including raw materials, intermediate stages and finished products, as well as all sectors. The main difference between the producer price index and the consumer price index is that the former covers goods only, at the wholesale level, while the latter covers goods and services. A rise in the producer price index may foreshadow another rise in real estate prices.
The Statistical Service of Cyprus also noted that, in the first quarter of 2025, the Construction Production Index reached 112.65 units (based on 2015 = 100.00), which was 1% higher than in the same period of 2024.
By type of project, the index for commercial buildings increased by 0.9%, while the index for civil engineering projects increased by 6.9%. This growth reflects moderately positive dynamics in project implementation rates, which remain stable despite economic difficulties. The quarterly
Construction Output Index is a tool for monitoring short-term changes in construction activity. It is a volume indicator that approximates changes in value added at constant prices. Consequently, it can be considered an indicator of growth rates in the construction sector.
Overall, the data reflects moderate but steady dynamics in the construction sector in terms of activity and price pressure. This trend is expected to impact the domestic real estate market in the near future.