Increase in construction costs slows down

TIRANA, Sept. 12 – Construction costs registered a slowdown in the second quarter of 2011 when they dropped by 0.2 percent compared to the previous quarter but were up 0.2 percent year-on-year. Data from the country’s Institute of Statistics (INSTAT) show the slight drop in the construction cost index compared to the first quarter of 2011 was a result of lower expenditure for electrical material and transport whose prices fell by 0.3 percent and 1.2 percent, respectively. Material and payroll costs in the second quarter of 2011 rose by 0.3 percent and 0.6 percent compared to early 2011 and 1.1 and 0.6 percent y-o-y. The Construction Cost Index calculates the difference of expenditure in construction, taking into consideration the change of basic input prices such as construction materials, construction vehicles and equipment, as well as expenses for employees. Latest INSTAT data show the construction sector which had been in crisis since 2008 returned to growth increasing by 4.8 percent compared to the first quarter of 2010 and 11.8 percent compared to the final quarter of 2010. However, confidence in the construction industry registered an 11.2 percent drop in the second quarter of this year. Reports show citizens are becoming more reluctant to buy new apartments because of falling revenues and a sharp decrease in immigrant remittances.