Cyprus construction sector activity declines as costs continue to rise

The Cyprus Statistical Service (Cystat) on Thursday reported a year-on-year drop in construction production during the fourth quarter of 2022, while producer prices in construction saw a significant annual increase of 11.1 per cent.

According to the report, the Production Index in Construction reached 209.80 units during the fourth quarter of 2022, with the reference year being 2015. This marks a decrease of 1.7 per cent compared to the fourth quarter of 2021.

The Production Index in Construction is an economic indicator that measures the level of output or production in the construction industry over time.

It is calculated by combining the volume of construction work with data on prices to give an indication of the value of construction production.

Additionally, the index is often used to track changes in the overall level of activity in the construction sector and to provide insight into the performance of the industry over time.

Moreover, there was a decrease of 0.9 per cent in building projects during the fourth quarter of 2022, while civil engineering projects contracted by 6.9 per cent, compared to the same quarter in 2021.

For the period between January and December 2022, the index recorded a drop of 5.4 per cent compared to the corresponding period of 2021.

In addition, for the above period, the index for buildings registered a decrease of 6.5 per cent while the index for civil engineering projects increased by 1.6 per cent.

Meanwhile, according to a separate but related report from the Cyprus Statistical Service, the Producer Price Index in Construction reached 134.71 units during the fourth quarter of 2022, marking an increase of 4 per cent compared to the third quarter of 2022.

What is more, compared to the corresponding quarter from last year, the index increased by 11.1 per cent.

The Producer Price Index in Construction measures the average change over time in the selling prices that domestic producers receive for their construction products and services.

It is used to track inflation in the construction industry and provides an indication of the trends in the costs of construction inputs, such as materials, labour, and equipment.

Compared to the corresponding quarter in 2021, building projects increased by 9.1 per cent and civil engineering projects increased by 18.1 per cent in Q4 2022, according to project type.

For the period between January and December 2022, the Producer Price Index in Construction marked an increase of 11.3 per cent compared to the corresponding period of 2021.

Finally, the index for buildings saw a rise of 11.8 per cent, while civil engineering projects saw an increase of 9.6 per cent.