The construction output price in the United Kingdom has reached an annual growth rate of two percent in September 2024. Construction costs have been increasing at a lower rate than in 2022 and 2023. The year-over-year growth rate reached over 10 percent in May and June of 2022. Public and private housing was the construction segment with the highest output price increase. How have material costs developed over the years? Several factors influence construction material costs, including supply and demand, regulatory requirements, and transportation logistics. Manufacturing efficiency and global trade policies also play a big part, along with economic factors like inflation and currency fluctuations. In June 2022, the price of construction materials for new houses in the UK were 53 percent higher than in 2015. What is the largest component of those costs? Labor costs are often one of the largest expenses in construction projects. That is due to the skilled nature of the work, which has a high demand for specialized trades. The construction sector's labor costs accounted for around 58 percent of the sector's earnings in the United Kingdom in 2023. In the past years, the size of labor costs as a share of the construction sector rose by more than three percentage points, indicating that labor costs have increased at a faster rate than the overall revenue of the industry.

Building materials made of steel, copper and other metals had some of the highest price growth rates in the U.S. in early 2025 in comparison to the previous year. The growth rate of the cost of several construction materials was slightly lower than in late 2024. It is important to note, though, that the figures provided are Producer Price Indices, which cover production within the United States, but do not include imports or tariffs. This might matter for lumber, as Canada's wood production is normally large enough that the U.S. can import it from its neighboring country. Construction material prices in the United Kingdom Similarly to these trends in the U.S., at that time the price growth rate of construction materials in the UK were generally lower 2024 than in 2023. Nevertheless, the cost of some construction materials in the UK still rose that year, with several of those items reaching price growth rates of over **** percent. Considering that those materials make up a very big share of the costs incurred for a construction project, those developments may also have affected the average construction output price in the UK. Construction material shortages during the COVID-19 pandemic During the first years of the COVID-19 pandemic, there often were supply problems and material shortages, which created instability in the construction market. According to a survey among construction contractors, the construction materials most affected by shortages in the U.S. during most of 2021 were steel and lumber. This was also a problem on the other side of the Atlantic: The share of building construction companies experiencing shortages in Germany soared between March and June 2021, staying at high levels for over a year. Meanwhile, the shortage of material or equipment was one of the main factors limiting the building activity in France in June 2022.

The cost of labor and of subcontracting were the costs of high-rise building construction in Chile that increased the most in 2024. Meanwhile, the construction materials for the construction of high-rise buildings increased by 2.3 percent that year and it had fallen the previous year. In 2024, there was less area authorized for construction in Chile than in the previous year.

In the first quarter of 2025, San Francisco, Chicago, New York, and Honolulu were some of the U.S. cities with the highest housing construction costs. Meanwhile, Phoenix had one of the lowest construction costs for high-end multifamily homes at 190 U.S. dollars per square foot and Las Vegas for single-family homes between 240 and 480 U.S. dollars per square foot. Construction cost disparities As seen here, the construction cost for a high-end multi-family home in San Francisco in the first quarter of 2024 was over twice more expensive than in Phoenix. Meanwhile, there were also great differences in the cost of building a single-family house in New York and in Portland or Seattle. Some factors that may cause these disparities are the construction materials, installation, and composite costs, differing land values, wages, etc. For example, although the price of construction materials in the U.S. was rising at a slower level than in 2022 and 2023, several materials that are essential in most construction projects had growth rates of over five percent in 2024. Growing industry revenue Despite the economic uncertainty and other challenges, the size of the private construction market in the U.S. rose during the past years. It is important to consider that supply and demand for housing influences the revenue of this segment of the construction market. On the supply side, single-family home construction fell in 2023, but it is expected to rise in 2024 and 2025. On the demand side, some of the U.S. metropolitan areas with the highest sale prices of single-family homes were located in California, with San Jose-Sunnyvale-Santa Clara at the top of the ranking.

Construction Output Price Indices (OPIs) from January 2014 to December 2024, UK. Summary.

The index relates to costs ruling on the first day of each month. NATIONAL HOUSE CONSTRUCTION COST INDEX; Up until October 2006 it was known as the National House Building Index Oct 2000 data; The index since October, 2000, includes the first phase of an agreement following a review of rates of pay and grading structures for the Construction Industry and the first phase increase under the PPF. April, May and June 2001; Figures revised in July 2001due to 2% PPF Revised Terms. March 2002; The drop in the March 2002 figure is due to a decrease in the rate of PRSI from 12% to 10¾% with effect from 1 March 2002. The index from April 2002 excludes the one-off lump sum payment equal to 1% of basic pay on 1 April 2002 under the PPF. April, May, June 2003; Figures revised in August'03 due to the backdated increase of 3% from 1April 2003 under the National Partnership Agreement 'Sustaining Progress'. The increases in April and October 2006 index are due to Social Partnership Agreement "Towards 2016". March 2011; The drop in the March 2011 figure is due to a 7.5% decrease in labour costs. Methodology in producing the Index Prior to October 2006: The index relates solely to labour and material costs which should normally not exceed 65% of the total price of a house. It does not include items such as overheads, profit, interest charges, land development etc. The House Building Cost Index monitors labour costs in the construction industry and the cost of building materials. It does not include items such as overheads, profit, interest charges or land development. The labour costs include insurance cover and the building material costs include V.A.T. Coverage: The type of construction covered is a typical 3 bed-roomed, 2 level local authority house and the index is applied on a national basis. Data Collection: The labour costs are based on agreed labour rates, allowances etc. The building material prices are collected at the beginning of each month from the same suppliers for the same representative basket. Calculation: Labour and material costs for the construction of a typical 3 bed-roomed house are weighted together to produce the index. Post October 2006: The name change from the House Building Cost Index to the House Construction Cost Index was introduced in October 2006 when the method of assessing the materials sub-index was changed from pricing a basket of materials (representative of a typical 2 storey 3 bedroomed local authority house) to the CSO Table 3 Wholesale Price Index. The new Index does maintains continuity with the old HBCI. The most current data is published on these sheets. Previously published data may be subject to revision. Any change from the originally published data will be highlighted by a comment on the cell in question. These comments will be maintained for at least a year after the date of the value change. Oct 2008 data; Decrease due to a fall in the Oct Wholesale Price Index.

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US Residential Construction Market Size 2025-2029

The US residential construction market size is forecast to increase by USD 242.9 million at a CAGR of 4.5% between 2024 and 2029.

The Residential Construction Market in the US is experiencing significant growth driven by increasing household formation rates and a rising focus on sustainability in new projects. According to the latest data, household formation is projected to continue growing at a steady pace, fueling the demand for new residential units. This trend is particularly evident in urban areas, where population growth and limited space for new development are driving up demand. Meanwhile, the emphasis on sustainability in residential construction is transforming the market landscape. With consumers increasingly prioritizing energy efficiency and eco-friendly features in their homes, builders and developers are responding by incorporating green technologies and sustainable materials into their projects.
This shift not only appeals to environmentally-conscious consumers but also offers long-term cost savings and regulatory compliance benefits. However, the market is not without challenges. Skilled labor shortages continue to pose a significant hurdle for large-scale residential real estate projects. The ongoing shortage of skilled laborers, including carpenters, electricians, and plumbers, is driving up labor costs and delaying project timelines. To mitigate this challenge, some builders are exploring alternative solutions, such as modular construction and automation, to streamline their operations and reduce their reliance on traditional labor sources. The Residential Construction Market in the US presents significant opportunities for companies seeking to capitalize on the growing demand for new housing units and the shift towards sustainability.
However, navigating the challenges of labor shortages and rising costs will require innovative solutions and strategic planning. By staying informed of market trends and adapting to evolving consumer preferences, companies can effectively position themselves for success in this dynamic market.

What will be the size of the US Residential Construction Market during the forecast period?

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The residential construction market in the United States continues to exhibit dynamic activity, driven by various economic factors. Housing supply remains a key focus, with ongoing discussions surrounding the affordable housing trend and efforts to increase inventory, particularly for single-family homes and new constructions. Mortgage and federal funds rates have an impact on residential investment, with fluctuations influencing buyer decisions and construction costs. The labor market plays a crucial role, as workforce availability and wages affect both housing starts and cancellation rates. Inflation and interest rates, monitored closely by the Federal Reserve, also shape the market's direction. Recession risks and economic conditions influence construction spending across various sectors, including multifamily and single-family homes.
Federal programs, such as housing choice vouchers and fair housing initiatives, continue to support home buyers and promote equitable housing opportunities. Building permits and housing starts serve as essential indicators of market health and future growth, with some sectors experiencing double-digit growth. Overall, the residential construction market in the US remains a significant economic driver, shaped by a complex interplay of economic, demographic, and policy factors.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Product

  Apartments and condominiums
  Luxury Homes
  Other types


Type

  New construction
  Renovation


Application

  Single family
  Multi-family


Construction Material

  Wood-framed
  Concrete
  Steel
  Modular/Prefabricated


Geography

  US

By Product Insights

The apartments and condominiums segment is estimated to witness significant growth during the forecast period.

The residential construction market in the US is experiencing growth in both the apartment and condominium sectors, driven by the increasing trend toward urbanization and changing lifestyle preferences. Apartments, typically owned by property management companies, and condominiums, with individually owned units within a larger complex, contribute significantly to the market. The Federal Reserve's influence on the economy through the federal funds rate and mortgage rates impacts borrowing rates and home construction activity. The affordability of housing, particularly for younger generations, is a concern due to factors such as inflation, labor market conditions, and savings

Building construction price indexes (BCPI) by type of building and construction division. Quarterly data are available from the first quarter of 1981. The table presents data for the most recent reference period and the last four periods. The base period for the index is (2023=100).

Construction Cost Index: North West: Buildings: Renovated: Residential data was reported at 119.000 Oct2020=100 in Oct 2024. This records an increase from the previous number of 118.600 Oct2020=100 for Apr 2024. Construction Cost Index: North West: Buildings: Renovated: Residential data is updated semiannually, averaging 96.600 Oct2020=100 from Oct 1998 (Median) to Oct 2024, with 53 observations. The data reached an all-time high of 119.000 Oct2020=100 in Oct 2024 and a record low of 77.400 Oct2020=100 in Apr 1999. Construction Cost Index: North West: Buildings: Renovated: Residential data remains active status in CEIC and is reported by Swiss Federal Statistical Office. The data is categorized under Global Database’s Switzerland – Table CH.EA011: Construction Cost Index: October 2020 =100.

The historical series 'New dwellings; input price indices of building costs 2000 = 100, from 1990' shows the development of the costs (wages and materials) involved in building new dwellings in the Netherlands, and has become available by linking series which were calculated separately in the past. An input price index is based on price changes in several cost components involved in realising a product, in this case a new dwelling. Changes in other cost components such as building equipment (tools and machines), general costs, profits and risk are not included in the index. Other cost components, such as energy and transport, are also not taken into account as their influence on the final cost price is relatively modest. Land costs are also not included in the index.

From 1990 to December 1994 only figures of the materials are available. From 1995 onwards this series also includes wage figures. Also from 1995, figures are also available on total building costs by weighted aggregetion of these two series.

Data available from: - Materials: January 1990 - Wages: January 1995 - Total building costs: January 1995

Status of the figures: The price index figures for wages and the total construction costs are final until 2024. The figures for building materials are final until 2024.

Changes as of November 29th, 2024: Since this publication, a switch has been made to a different rounding strategy, whereby the changes are calculated on unrounded index figures and annual figures are calculated from rounded and published figures. With this switch there is more consistency with other statistics on Statline and statistics from Eurostat. As a result, mutations have changed across the entire series.

Changes as of June 30th, 2025: Figures of May 2025 have been added.

When will new figures be published? New figures are published about 30 days after the month under review.

Graph and download economic data for Producer Price Index by Industry: Building Material and Supplies Dealers (PCU44414441) from Dec 2003 to Jun 2025 about dealers, materials, supplies, buildings, PPI, industry, inflation, price index, indexes, price, and USA.

London was one of the most expensive cities to build a home in Europe in 2024. The cost of constructing a high-rise apartment in the Irish capital was around 1,550 U.S. dollars per square meter cheaper than in London. Paris had lower housing construction costs than in Amsterdam, Munich, or Dublin.

Building construction price indexes (BCPI) by type of building. Quarterly data are available from the second quarter of 1982. The table presents quarter-over-quarter and year-over-year percentage changes for various aggregation levels. The base period for the index is (2017=100).

This table contains monthly figures on the input price index of new dwellings; input price indices building costs to monitor the costs of new dwellings (labour and materials) in the Netherlands.

An input price index is determined on the basis of price changes of the various cost components making up the product - in this case a new dwelling. Changes in the prices of building equipment (tools and machinery), general costs, profit and risk are not included in the input price index. Other cost components, such as energy and transport, are also not taken into account as their influence on the final cost price is relatively modest. Land costs are also not included in the index.

Data available from: January 2012 to December 2023

Status of the figures: The figures of the wages and total building costs are definite up to and including the year 2022. The figures of the building materials are definite up to and including six months from the most recent reported month. The data for 2023 is provisional. Since this table has been discontinued, the data is no longer finalized.

Changes as of February 29, 2024 The index number series in this table use 2015 as the reference year (2015=100). To ensure that the results of the index series are more in line with current events, a so-called base shift is implemented once every five years. Due to the implementation of FRIBS (Framework Regulation Integrating Business Statistics) in 2021, this time the base shift is postponed by one year to 2021=100. The subsequent base shift will return to a regular year, namely 2025=100. Upon the publication of the reporting period of January 2024, such a base shift will occur, and the reference year will be switched to 2021 (2021=100). The index series with the reference 2021=100 will be published in new StatLine tables. This table will be discontinued from that moment and will no longer be updated. However, it will remain available in the archive. The new tables for 2021=100 will commence with the reporting month of January 2018.

Changes as of March 11, 2024 This table has been discontinued. This table is followed by New dwellings; input price indices building costs 2021=100. See paragraph 3.

Greece - Construction cost index was EUR122.10 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Greece - Construction cost index - last updated from the EUROSTAT on July of 2025. Historically, Greece - Construction cost index reached a record high of EUR122.10 points in March of 2025 and a record low of EUR76.10 points in March of 2000.

China Purchasing Price Index: Building Material data was reported at 94.300 Prev Year=100 in 2024. This records an increase from the previous number of 94.100 Prev Year=100 for 2023. China Purchasing Price Index: Building Material data is updated yearly, averaging 102.600 Prev Year=100 from Dec 1986 (Median) to 2024, with 39 observations. The data reached an all-time high of 140.900 Prev Year=100 in 1993 and a record low of 94.100 Prev Year=100 in 2023. China Purchasing Price Index: Building Material data remains active status in CEIC and is reported by National Bureau of Statistics. The data is categorized under China Premium Database’s Inflation – Table CN.IE: Purchasing Price Index.

Between 2022 and 2024, the construction price of residential and non-residential buildings in Canada has grown at the same pace. The price of both types of buildings was roughly six percent higher in the last quarter of 2024 than in 2023, which is the year when the index base was set at 100. Nevertheless, that only considers the cost of buildings in 15 selected metropolitan areas in Canada. Toronto was by far the metropolitan region with the highest construction costs in Canada.

What determines construction costs? The growth rate of the construction price of different types of buildings tends to follow similar trends to some extent. For example, price growth rates in Canada for most types of buildings were more moderate in 2023 than in previous years. However, those figures show a lot of disparity, with the cost of building a high rise apartment building growing much faster than that of other types of buildings. This might be because the construction costs depend on elements such as the location, materials, and complexity of the building, which tend to be quite different for each type of building.

Lumber building materials in Canada In 2023, Canada was the world’s second-largest exporter of wood building materials such as veneer sheets, parquet flooring, particleboard, laminated wood, and builders’ joinery and carpentry. Forestry, logging, and processing wood into ready-to-use materials are important industries in the Canadian economy. High price growth rates of building materials impact negatively the construction industry as their activities become more expensive. However, the forestry and logging industry benefited from the cost of lumber rising in 2020 and 2021. In the past years, the price of lumber, however, has fallen again.

Italy - Construction cost index was EUR114.10 points in December of 2023, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Italy - Construction cost index - last updated from the EUROSTAT on July of 2025. Historically, Italy - Construction cost index reached a record high of EUR114.70 points in December of 2022 and a record low of EUR47.70 points in March of 1990.

Netherlands - Construction cost index was EUR121.20 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Netherlands - Construction cost index - last updated from the EUROSTAT on July of 2025. Historically, Netherlands - Construction cost index reached a record high of EUR121.20 points in March of 2025 and a record low of EUR62.90 points in March of 2000.

Indonesia Wholesale Price Index: Construction Materials: Commodities: Bricks data was reported at 99.940 2023=100 in Apr 2025. This records an increase from the previous number of 99.840 2023=100 for Mar 2025. Indonesia Wholesale Price Index: Construction Materials: Commodities: Bricks data is updated monthly, averaging 99.890 2023=100 from Feb 2024 (Median) to Apr 2025, with 8 observations. The data reached an all-time high of 100.270 2023=100 in Mar 2024 and a record low of 98.910 2023=100 in Feb 2025. Indonesia Wholesale Price Index: Construction Materials: Commodities: Bricks data remains active status in CEIC and is reported by Statistics Indonesia. The data is categorized under Indonesia Premium Database’s Inflation – Table ID.IB007: Wholesale Price Index: by Sector: Construction Materials.