Construction Costs Drop in January 2023 Due to Decrease in Wages

According to the preliminary data released by the National Statistics Office of Georgia (Geostat), the Construction Cost Index (CCI) experienced a decrease of 5.2% in January 2023 compared to the previous month.

The decline was mainly attributed to a significant decrease of 23.4% in the average monthly nominal wages of employees in the construction sector, which contributed to a decrease of 4.8 percentage points in the total index change.

However, when compared to February 2022, the CCI experienced an increase of 5.7%. This upward trend was largely driven by the 4.8% increase in construction material prices, which contributed 2.73 percentage points to the total index change.

It is important to note that fluctuations in the CCI can have significant impacts on the construction sector and related industries, as changes in prices can impact the cost of construction projects and ultimately affect the profitability of companies operating in the sector.