The Turkish construction sector index, which measures changes in labor and material costs, increased by 6.46% in the last month and by a record 114.74% in a year.
According to TÜİK data, while there was a significant increase in labor costs in the sector, the main cost was seen in material prices. In July, the material index increased by 126.46% and the labor index by 83.89% compared to the same month last year.
Commodity prices and currency effect
Rising costs in the construction sector are being driven by increases in the price of commodities, particularly steel. Despite a recent decrease, the price of steel and other materials used in construction has risen sharply in recent months.
The price of building products has been rising rapidly, and since most of these products are imported, this has increased costs. The dollar has appreciated by 35% this year and is now close to historic highs.
In the construction sector, costs are calculated separately for building construction and non-building structures. The building construction cost index rose by 7.10% in July from the previous month, and by 110.56% from the same month last year. For non-building structures, the construction cost index rose by 4.48% in July from the previous month, and by 129.10% from the same month last year.