National Statistics Office of Georgia is starting publication of a new indicator – the Construction Cost Index (CCI). Its purpose is to reflect changes over time in prices for inputs (production factors – materials and services) used during the construction process.
Inputs include: materials, labor, energy, transportation and other costs. This index is an important macroeconomic indicator and is necessary for accurate assessment of investment environment, also
for planning and forecasting in construction sector.
Geostat has been working on the CCI since 2013, within the cooperation project with Statistics Sweden. In 2017 a
trial calculation was started, while since June 2018 publication of the index has begun on a quarterly basis.
Several types of Construction Cost Index can be distinguished, among which the most widespread in international
practice is so called Input Price Index. The latter includes only prices for inputs used during the construction
process. The index calculated by Geostat is exactly the input-type index.
In the first quarter of 2018 the Construction Cost Index (CCI) decreased by 5.6 percent compared to the
previous quarter. This decrease was mainly caused by a 21.8 percent decline in average monthly nominal salary of
employees in business sector in construction, which resulted in a -6.68 percentage point contribution to the total
index change. In the mentioned period prices increased by 1.7 percent for construction materials and by 1.4
percent for transportation, fuel and electricity.
Compared to the first quarter of 2017 the CCI increased by 5.2 percent. This was mainly attributable to a 5.7
percent price increase for construction materials, with a relevant contribution of 3.28 percentage points to the
overall index growth. Along with this, there was a 3.3 percent increase in average monthly nominal salary of
employees in business sector in construction, while prices for machinery posted a decrease of 1.3 percent.
The following table shows the CCI for the first quarter of 2018, compared to the previous quarter and the
same quarter of the previous year, as well as the contributions of cost categories to the total index.