Construction cost inflation in New Zealand is relatively contained despite significant pressure from rising fuel prices due to the Middle East conflict, Quotable Value (QV) said in a Tuesday report.
The latest CostBuilder monthly update showed both elemental and trade rates rising by an average of 0.3% in April from the previous month. However, soaring diesel costs, which posted a monthly gain of 37.6% and are up nearly 110% since February, continue to flow through to construction, especially in fuel-intensive works.
Piling and demolition costs increased by 1.6% and 1.3%, respectively, mainly as a result of elevated diesel prices. Diesel costs also drove a 2.2% increase in site preparation costs and a 1.9% increase in substructure costs, the report said.
"What makes fuel different to other inputs is how broadly it feeds into the construction process - from machinery on site through to transport and materials - so the impact tends to build over time rather than show up all at once," said QV CostBuilder spokesperson and quantity surveyor Martin Bisset.
"The key thing is that price pressure is building, even if it's not fully reflected in headline cost increases just yet," Bisset added.