Apartments and roads were the most expensive projects to build in May: why?

The construction sector has been experiencing financial difficulties in the last year, however, the rate of growth of its costs began to decline. In the case of the building sector, according to the Construction Cost Index of Buildings (Icoced) of the National Administrative Department of Statistics (Dane), The costs of this sector grew 3.58% compared to the same period of the previous year; in horizontal infrastructure, the Construction Index Civil Works (Icociv) showed an increase of 4.65% compared to 2023.

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In Icoced, while in non-residential buildings costs rose 3.57%, in residential buildings they rose 3.59%. In the first, the greatest variation was seen in the construction of educational infrastructure with 4.42%, followed by other destinations with 3.77%, warehouses with 3.61%, hospitals and care centers, and offices with 3.29%. hotels with 3.22%, commerce with 3.21%, among others.

In the case of buildings for residential use, while in apartments (with 56.8% of the weight) costs increased by 3.57%, in houses they increased by 2.7%. For its part, the NO VIS home presented an annual variation of 3.59%, while the VIS home had a variation of 3.61%.

“In May 2024, the largest annual price variations compared to the same month of the previous year, according to Icoced, occurred in: Cúcuta (4.06%), Villavicencio (3.94%), and Manizales (3.90%). In contrast, the domains that presented the lowest price variations were: Pasto (3.06%) and Cali (3.13%)”, the report states.

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By cost groups, the largest price increases compared to the same month of the previous year occurred in: labor (8.24%), Equipment (7.15%) and transportation (6.92%). On the other hand, the cost group that presented the only negative variation was special equipment for construction (-4.26%).

Among the inputs, the greatest positive contributions to the total variation of Icoced (3.58%) were presented in: gang (8.31%) with 1.03 percentage points, common concrete (5.65%) with 0.59 percentage points and cement (4.02%) with 0.32 percentage points.

The largest negative contributions to the total annual variation of the index were found in: mesh (-11.68%), which subtracted 0.17 percentage points from the variation and corrugated steel (-1.69%), which subtracted 0.12 percentage points from the variation.

In May 2024, The variation of the Icociv was 4.65%, compared to the same month of 2023. One of the five groups related to the construction of civil works presented a variation above the national average (4.65%): roads, streets, railways and runways, bridges, elevated highways and tunnels (5.40%).

The other groups showed variations below the national average: constructions in mines and industrial plants (4.36%), pipelines for long-distance gas transmission, communication lines and power cables; local pipelines and cables, and related works (3.58%), ports, canals, dams, irrigation systems and other hydraulic works (aqueducts) and outdoor sports constructions and other civil engineering works (3.47% each).

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By subclasses and when comparing May 2024 with May 2023, the largest variations were seen in dams (7%), long-distance pipelines (6.72%) and bridges and elevated roads (6.62%). Meanwhile, the smallest price variations were found in: irrigation systems and hydraulic works for flood control (1.78%) and local cables and related works (0.92%).

Likewise, in this period, when comparing by type of work, local roads showed an increase in costs of (7.48%), followed by reservoirs (7%) and construction of oil pipelines, gas pipelines and multi-purpose pipelines (6.72%). On the other hand, the smallest annual variations according to type of work were observed in: Construction of medium and low voltage lines (0.09%)irrigation systems (1.78%) and mobile telephony (2.19%).

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By cost groups, in May 2024, the largest price variations compared to the same month of the previous year were in: labor (8.81%), transportation (6.88%) and machinery (5.8 %).

Paula Galeano Balaguera
Portfolio Journalist