According to new data from the Cyprus Statistical Service, the Construction Producer Price Index reached 138.29 points in the fourth quarter of 2023 (on a 2015 basis = 100.00), an increase of 0.8% compared to the third quarter of 2023 and 2.7% compared to the same quarter of 2022.
Looking by project type, the Index increased by 1.4% for commercial buildings and 6.9% for civil engineering projects. In turn, from January through December 2023, the Construction Producer Price Index increased 4.8% from the same period in 2022. For commercial buildings, the Index increased by 1.6%, while for civil construction projects it increased by 16.6%
As a reminder, the Producer Price Index is a measure of the average level of change in the wholesale prices of raw materials, inputs and intermediate consumption goods at which national producers sell their goods.
The Producer Price Index covers all stages of production: raw materials, intermediate stages, finished goods, and all sectors. Thus, its main difference from the consumer price index is that it covers only goods and not services, and at the wholesale level of their realization. A rise in the producer price index could herald another rise in real estate prices.
Statistics Cyprus also noted that in the fourth quarter of 2023, the Construction Production Index reached 227.99 units (on a 2015 basis = 100.00), an increase of 9.2 compared to the same period in 2022.
By project type, the Index for commercial buildings increased by 8.4% and civil engineering projects increased by 14.6% in the fourth quarter of 2023 compared to the corresponding quarter of 2022. Finally, from January through December 2023, the Index for construction production increased by 7.6%. For commercial buildings, the Index increased 8.3% over the year, while the Index for civil construction projects increased by 3.1%
The quarterly Construction Production 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. Thus, it can be viewed as an indicator of the growth rate of the construction sector.