Construction costs rise 11% in 2024, driven by labour expenses
The cost of construction in India increased by 11 per cent over the past year, primarily driven by a 25 per cent rise in labour expenses, according to Colliers India. While prices of key materials like cement dropped by 15 per cent and steel saw a marginal 1 per cent decrease, the surge in labour costs stretched construction budgets across sectors.
鈥淟abour, which constitutes over a quarter of construction costs, has seen significant inflation due to the demand for skilled workers and associated training and compliance costs,鈥� said Badal Yagnik, CEO of Colliers India.
The residential segment experienced the sharpest cost escalation due to a growing focus on quality construction and demand for gated communities. Meanwhile, commercial and industrial real estate remained resilient, with 37 million square feet of office space and 22 million square feet of warehousing space completed in the first nine months of 2024.
鈥淒espite rising costs, investments in automation and training are helping developers address manpower challenges and streamline project timelines,鈥� said Vimal Nadar, senior director at Colliers India.
With labour costs continuing to influence overall construction expenses, developers are exploring strategies to optimise operations and mitigate rising costs.
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