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The construction output price in the United Kingdom has reached an annual growth rate of *** percent in June 2025 compared to the same month of the previous year. Construction costs had been increasing at a lower rate than in 2022 and 2023, but started rising again slowly in late 2024. The year-over-year growth rate was over ** percent in May and July 2022. Public and private housing was the construction segment with the highest output price increase.

How have material costs developed over the years?

Several factors influence construction material costs, including supply and demand, regulatory requirements, and transportation logistics. Manufacturing efficiency and global trade policies also play a big part, along with economic factors like inflation and currency fluctuations. In June 2022, the price of construction materials for new houses in the UK were ** percent higher than in 2015.

What is the largest component of those costs?

Labor costs are often one of the largest expenses in construction projects. That is due to the skilled nature of the work, which has a high demand for specialized trades. The construction sector's labor costs accounted for around ** percent of the sector's earnings in the United Kingdom in 2024. In the past years, the size of labor costs as a share of the construction sector have increased slightly, but they were still lower than in before 2014.

As of June 2025, the construction output price growth rate has been revised to *** percent.