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Building & Construction Cost Escalation Report
New edition now available
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Macromonitor has just published a new edition of our report: Australian Construction Cost Trends - 2022. This new report provides detailed escalation projections for all types of construction costs in Australia.
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Australia’s surging rate of construction cost inflation will persist for the rest of calendar 2022, but then return to more normal rates, for all sectors, in calendar 2023. Note however, that we do not expect costs to drop back again following the current surge – rather we expect costs to continue rising from the new, higher base, albeit at more normal rates of increase (as per the chart below).
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The current acceleration in inflation is expected to see inflation of 9% nationally over the year to June 2022, and 6% over the year to December 2022.
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After the current peak in cost inflation, some items will continue to rise faster than they have previously, such as wages, due to a heightened inflation environment and higher inflationary expectations. But the items which have spiked the most, such as fuel and metals prices, will ultimately drop back somewhat, while probably still remaining relatively high.
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This implies a change from high positive rates of cost growth to negative cost growth, for certain items. And this negative growth will cause overall cost inflation to drop back to a relatively low rate, most notably in 2023, despite some items continuing to rise solidly.
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As we noted above, however, we do not expect total costs to decline following the current surge. Rather, cost inflation is forecast to simply continue rising, albeit at more normal annual rates of increase, from the new, higher, cost base.
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Our new report provides detailed escalation forecasts for all cost inputs (including each type of material, labour, fuel, equipment and services), across all construction segments (including houses, commercial building, resources, roads and other infrastructure).
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This report is an invaluable resource for any organisation requiring cost escalation projections or inputs into cost planning.
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