Producer prices, construction costs increase

TIRANA, March 5 – Producer prices slightly rose by 0.1 percent year-on-year in the final quarter of 2013, the second slight increase in a row after ending their downward trend in the third quarter of 2013, according to a report by state Institute of Statistics (INSTAT). Compared to the third quarter of 2013, the PPI, measuring price changes from the makers of a product rose by 0.3 percent.
INSTAT data show the PPI dropped by 1.1 percent y-o-y for the extractive industry and rose by 0.2 percent for the manufacturing industry.
The PPI for domestic products rose by 0.1 percent compared to the third quarter of 2013 with producer prices in the extractive industry up by 1.4 percent and prices in the manufacturing industry unchanged. The export price index dropped by 0.5 percent compared to the third quarter of 2013 with prices in the processing industry which accounts for the majority of Albanian exports down by 0.6 percent. The export price index for the extractive industry remained unchanged.
Meanwhile, construction costs registered a slight increase even in the final quarter of 2013 when they rose by 1.2 percent year-on-year and were up by 0.6 percent compared to the third quarter of 2013. INSTAT data show the slight increase in the construction cost index was a result of higher material, wages and machinery expenditure.
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.
In crisis since 2008, due to falling purchasing power especially from crisis-hit migrants, the construction sector has failed to recover during the past four years also due to lending standards becoming tighter as bad loans stand at a record 24 percent.