Height Construction and Infrastructure Indices

Making informed and effective business and procurement decisions is important. A key part of this involves examining industry and cost trends. These are constantly changing due to domestic and international events, political decisions, and the global and local economy.

Understanding cost trends within your industry is vital for making well-informed decisions about current and future projects. It assists with reducing risk and increasing governance and stakeholder confidence. 

As industries evolve, monitoring an industry cost breakdown index helps you to understand the impact of changes on your business, enhancing your focus on what is important to enable you to adjust your strategies and plan accordingly.

Height have developed two indices as below that track cost trends across our core industries: infrastructure and construction. 

As a bonus and to help make the index more relatable, Height are now tracking the price of a Tradies Lunch box – otherwise known as “Tradie Lunchonomics” – This index tracks the cost of the ever so delicious, fulfilling, and energising meal of a pie and can of V.

To discuss further any of the trends and how they might impact your organisation,  get in touch today.

Construction index
Values

The Height Construction Index tracks cost changes with a custom weighting for core components of construction work: materials, labour, diesel, transport, plant, and consulting services.

It tracks these categories over time and helps create a trend for businesses wanting to understand more about the cost breakdown specifically focused on construction and infrastructure.

We encourage you to look at our Tradie Lunchonomics index that tracks the price of a pie and a can of V – the quintessential Tradies lunch box. Check out how this very relatable index tracks against the construction and infrastructure industry. 

Construction index
Annualised % change

The Height Construction Index tracks cost changes with a custom weighting for core components of construction work: materials, labour, diesel, transport, plant, and consulting services.

It tracks these categories over time and helps create a trend for businesses wanting to understand more about the cost breakdown specifically focussed on construction and infrastructure.

This graph represents the year on year percentage increase.

We encourage you to look at our Tradie Lunchonomics index that tracks the price of a pie and a can of V – the quintessential Tradies lunch box. Check out how this very relatable index tracks against the construction and infrastructure industry. 

Maintenance index
Values

The Height Maintenance Index tracks cost changes for core components of maintenance work: materials, labour, and plant.

The weighting for each category is based on real experience with our clients, supported by Height’s expert knowledge and expansive research within industry.

We encourage you to look at our Tradie Lunchonomics index that tracks the price of a pie and a can of V – the quintessential Tradies lunch box. Check out how this very relatable index tracks against maintenance in the construction and infrastructure industry.  

Maintenance index
Annualised % change

The Height Maintenance Index tracks cost changes for core components of maintenance work: materials, labour, and plant.

The weighting for each category is based on real experience with our clients, supported by Height’s expert knowledge and expansive research within industry.

This graph represents the year on year percentage increase.

We encourage you to look at our Tradie Lunchonomics index that tracks the price of a pie and a can of V – the quintessential Tradies lunch box. Check out how this very relatable index tracks against maintenance in the construction and infrastructure industry.  

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  • Analysis for Q4 2023

    The Height index shows that labour within the construction/infrastructure industry has grown at a faster rate than the overall LCI since Q1 2020, with a 21% increase opposed to the LCI with 11% pa in the same period.

    Over the last three years high inflationary pressure has driven consistent high growth in labour costs within the construction sector with percentage increases between 3.8% and 4.4%.

    Materials, as expected showed a spike during COVID. However, our graph shows a significant decrease from 13% down to 2% pa over the last year. This is likely due to the global economy weakening, which has taken the heat out of international commodity prices and shipping costs.

    The annual growth of this index (excluding Diesel) has fallen from 9.5% to 3.76% pa since last year. This shows that the overall rate of increase for cost of construction / Infrastructure is slowing. This is reflective of the latest CPI, which had its lowest quarterly increase of 4.7% since 2021.

    To highlight and hammer home the impact of inflation, take a look at our Tradies lunch box index (our index that tracks the price of a pie and can of V). For the first time in NZ history, the Tradies lunchbox has reached the double digits and is now priced at $10.00. 

  • Analysis for Q1 2024

    Analysis for Q1 2024 Our construction index saw a slight increase of 2.6% from Q1 2023 - Q1 2024 which is a significant reduction on the 7% a year prior. This is likely due to supply vs demand beginning to find an equilibrium after the disruptions over previous years. This softening in the rise in costs will be welcome news for the construction industry.

    The maintenance index also saw an increase of 2.9% which is again, a significant reduction on the 6.1% for the previous year. This echoes the construction index and in this case the cooling of plant and material costs have been the dominant factors in driving the reduction.

    The new National government is now well into their first year and their priorities have been made clear (especially through their recent budget announcement). Businesses should see an increase in approved infrastructure projects over the next five years ($68b forecasted) which would likely see a further increase in demand and therefore lifting our infrastructure index percentage.

    Labour continues to see an increase of around 4% within both construction and infrastructure. Noting the government crackdown on “wasteful spending”, New Zealand may see an increase in unemployment leading to a decrease in our labour index. However, the current cost of living crisis continues to challenge that rhetoric and businesses are continuously being forced to keep their wages rising to help employees through this high inflationary economy.

    The Tradies Lunchbox increased again solidifying its price in the double digits, now sitting at $10.08 for the succulent meal. With inflation beginning to slow, could we see a more affordable lunchtime meal come next Quater? 

  • Analysis for Q2 2024

    After inflation peaking in Q3 of 2022 at 7.2% we have continued to see a drop with the most recent figures in Q2 of 2024 showing 3.3%. The RBNZ has responded by decreasing the OCR by 25 basis points which has lead to the banks slashing their interest rates. Although this does signify the end to a high inflationary economy, the storm has not yet subsided with businesses still facing considerable challenges and many forced to make difficult strategic decisions.

    Although our Labour index has shown a consistent growth of around 3-4% over the previous 4 years, we do expect this to drop slightly as the impact of businesses being forced to restructure comes to the forefront.

    Interestingly, our Transport index has shown an increase of 6% which is in line with ANZ’s NZ Truckometer index that tracks the amount of heavy vehicles on the road which tends to provide a good steer on goods production and freight in real time. This suggests that although truck traffic remains low, there are signs of an improving economy.

    Heights Construction Index has continued to increase at a significantly lower rate than what we were experiencing in 2022 where it rose around 10% annually. Now just at 2.89% it sits within the RBNZ inflationary target band which suggests that we are back at a manageable position where price hikes overall are not making considerable impacts on the cost of construction.

    Almost mirroring the Construction index, Heights Maintenance index shows a similar trend with the annual percentage increase sitting at just under 3% for Q2. The cost for labour and plant are the key contributors holding this percentage up with a 3.2% and 4.3% increase respectively for Q2. As we see these costs reduce over the coming months, our Construction and Maintenance index figures should follow.

    Tradies will be jumping for joy, or perhaps a second pie as the rise in costs for our Tradies Lunch Box has reduced from 11.26% in Q2 of 2023 to 4.29% for Q2 2024. This equates to a net $170.38 saved over a year or just over 16 extra meals..

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