Latvia: construction costs rise

Latvia: construction costs rise
Published: 23 January 2006

Last year construction costs in Latvia rose by 11.4 percent on average from 2004, which is the steepest rise in ten years, the Latvian statistics bureau said. The statistics bureau said salaries of construction workers saw the most rapid increase growing by 16.1 per cent over the past year. Costs of construction equipment maintenance and operation rose by 13.8 per cent, and prices of building materials went up 9.6 per cent. Costs in the renovation of office buildings grew by 10.9 per cent, in the reconstruction and construction of industrial, agricultural and commercial buildings by 10.3 per cent, in the construction of dwelling houses by 8.9 per cent. In the fourth quarter of 2005 construction costs in Latvia increased by 13.6 percent on average from the same period in 2004.

A local analyst said increase in construction costs this year will be related to the rise in builders` salaries as well as growing costs of construction materials and equipment. "Salaries of workers will grow by 20 per cent, prices of construction materials will grow by 15 per cent, and energy resources will also grow more expensive," the expert said.

"For example, cement prices this year will grow by 20 per cent, the planned increase in workers` salaries is 20 per cent, while fuel price hikes are unpredictable," the head of the Latvian building association said.