Georgia’s Construction Cost Index (CCI) experienced a 0.4% decrease in November, marking a notable shift in the state's construction sector. The drop, reported by the National Statistics Office on Monday, was attributed to a reduction in the average monthly nominal wages of workers in the construction industry. Specifically, the wages in the sector fell by 2.7%, which contributed a negative 0.53 percentage points to the monthly change in the Index.

While the monthly figures reflect a decline, the year-over-year data paints a different picture. Compared to November 2023, the CCI rose by 5.5%. This increase was primarily driven by a significant 24.8% jump in construction sector wages, which bolstered the Index by 3.82 percentage points. Alongside this, construction material prices saw an uptick of 3%, adding 1.81 percentage points to the annual growth.

In addition to the year-over-year comparison, the Index showed a substantial 19.6% rise when compared to February 2022, reflecting the dynamic changes in the construction sector over the past two years.

The statistics also highlight how wages and material costs are crucial to shaping the construction cost landscape. The combination of wage fluctuations and material price increases plays a vital role in determining the overall cost of construction in Georgia. Despite the recent decline in November, the long-term trend reveals an overall upward trajectory in construction costs, largely influenced by labor and material pricing.

The Office's report also suggested that this decrease in wages could be linked to broader economic factors affecting the construction sector. The industry, like many others, has faced challenges related to labor shortages and inflationary pressures, which might explain the dip in wages. However, with construction material prices still on the rise and the overall positive annual growth in CCI, the industry is expected to continue adjusting to these factors.

Looking ahead, construction industry stakeholders will likely keep a close eye on further wage trends and material price fluctuations, as they will remain key elements influencing the cost of construction projects in Georgia.