This newsletter aims to provide a brief overview of the evolution of the cost due to the increasingly challenging energy cost and elevated inflation. This leads to a change of construction material rates for the upcoming year.
Starting with a general overview, the Spanish gross domestic product by the end of 2022 was still in a growth despite that the inflation was still increasing a 0.1% according to the INE (National Institute of Statistics). Raw materials in general had an increase of more than a 30% since the start of the Covid pandemic, according to the INE institute. The RICS institute advised that the the growth of the residential construction sector is still in growth but the expectations of that are slowly less generously
The real estate industry at the island provides provide 20% of the PIB. Now the sector faces some challenges as now there is a high demand of qualified labour due to the increasing demand of luxury residential projects and at the same time the lack of raw materials globally and from the main land.
This past year the construction costs had an increase of the 30% according to the INE (National institute of statistics) due to the constant increase of the raw materials, the war and other items the siderurgyc materials had an increase at the spanish market around the 50%, the wood 39,6% , the ceramics the 39,6% and the oil a 52,8%.
Here, locally in Majorca, we have been advised from the different supply companies that materials such as +10% on prefab materials, +13% on plaster walls and insulation, +11 on concrete, all of this as an average and depending on the constructive solution. This can be extrapolable to the other construction materials.
As this year is starting we expect it to be challenging as the same time as interesting due to the number of projects that we are facing all over the island in Pollença, Alcudia, Manacor and Palma.