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CPI moderates to 5,1% y/y (Mar-10)
Wednesday, 28th April 2010The March CPI increased by a lower than expected 5.1%, following a 5,7% increase in February. Food inflation moderated to an annual increase of just 1,3%, while housing and utilities continued to exceed the inflation rate, up by 6.9% y/y. Housing inflation was pushed by a 24% y/y increase in electricity and a 9,4% y/y increase in water. Petrol increased by 14,9%, and health by 7,0%.
The lower inflation rate, now well below the upper 6% target is a positive sign for the building industry. Although the Reserve Bank has hinted towards a no change monetary policy stance for the immediate future, it bodes well for a stable interest rate, currently at a 28 year low of 10%. Price stability is key to support the building industry, which at the moment, will probably take 24 months to recover.
No major change in output building cost inflation (2010 Q1)
Wednesday, 28th April 2010The cost to client reflects changes in the cost to contractor (or input costs), including market factors such as profit, capacity and risk. It is important that information is smoothed over a period due to the high rate of volatility in the month to month data, dependant on the type of projects awarded during the particular period. Rates are compiled from a sample of projects awarded during a particular period, and does not differentiate between the different types of building methods. However in the case of housing, social housing is excluded.
There was no real change in the average overall building rate for commercial (including office, retail and industrial) and residential developments during the 1st quarter of 2010 compared to the last quarter of 2009. However, the average construction cost for retail and office developments did soften by 2,7% and 3,4% respectively, while the average cost of industrial developments rose by an estimated 3,9%. The cost to client reflects changes in the cost to contractor (or input costs), including market factors such as profit, capacity and risk. Further details available to subscribers only.
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