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Cost of Construction Still Rising in Argentina - February 2025 increased 2.3%

BuySellBA

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Cost of Construction Still Rising in Argentina

In February 2025, the construction cost in Argentina experienced a monthly increase of 2.3%, while the cumulative increase for the year was 3.3%. On an interannual basis, the increase was significant, reaching 60.7%.

This rise was distributed across different components of construction costs:

Materials: The cost of materials increased by 1.9% monthly.

Labor: There was a 2.7% increase in the overall cost of labor.

Salaried Labor: This increased by 3%.

Subcontracted Labor: The cost of subcontracted labor rose by 1.4%.

General Expenses: General expenses increased by 2.1%.

These increases reflect the persistent inflation in Argentina, which has significantly affected costs in the construction sector.

In recent years, general inflation in the country has been very high, leading to substantial increases in construction costs. For example, in 2023, construction costs in Argentina nearly doubled in a year, with increases of 97.9% in the Buenos Aires metropolitan area and 108% in the province of Buenos Aires.

Components of Construction Costs

1. Materials
The cost of materials is a crucial component in construction. In January 2025, the index of material costs in Argentina reached a historic high of 123,020.6 points (base 1993=100), reflecting a significant increase from the previous month.

2. Labor
Labor has also experienced a substantial increase. The index of labor costs in January 2025 reached 130,257.7 points, indicating a continuous rise in wage costs due to high inflation. Additionally, salary expenditures in the construction sector have more than doubled in recent years, reaching over nine billion Argentine pesos in the third quarter of 2023.

3. General Expenses
General expenses include a variety of indirect costs, such as rents, utilities, and other administrative expenses. These have also increased due to widespread inflation.

Real estate prices are heading up.

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