Construction costs keep rising

Construction businesses charged customers more in the December 2020 quarter, Stats NZ said today.

At the same time, prices charged by hospitality businesses such as hotels, motels, and restaurants increased after COVID-19 hit the tourism industry and prices were cut last year.

The construction industry saw a 0.5 percent increase in prices received from customers in the December 2020 quarter. Contributing to this was a 0.9 percent increase in building construction prices and a 0.8 percent increase in construction services prices.

"We've recently seen average wages in the construction industry increase, increases in the number of people employed in the construction industry, as well as near-record levels of residential building consents," business prices delivery manager Bryan Downes said.

See Labour market statistics: December 2020 quarter and Building consents issued: December 2020 for more information.

Building construction prices have continued to steadily rise over time, reflecting increases in both residential and non-residential construction. Heavy and civil engineering construction prices have been more variable.

Prices snap back for accommodation and food services

Accommodation and food services saw a stronger than usual price increase in the December 2020 quarter, up 4.4 percent, partially bouncing back after a big fall earlier in 2020.

There is typically a seasonal trend, with rising prices in December quarters coinciding with the peak travel and tourism season.

The December 2020 quarter had the largest accommodation and food services quarterly price increase since the series began in June 1994.

"Despite the increase in accommodation prices in the December 2020 quarter, card spending on accommodation is still significantly down on previous years" Mr Downes said.

See Higher accommodation prices contribute to inflation and Electronic card transactions: January 2021 for more information.