Prices of Construction Cost Index stable in Q1 2020: SCAD

Construction Cost Index (CCI), remained unchanged in the first quarter of 2020 compared with the first quarter of 2019 with the index at 98.0 per cent in both corresponding quarters, according to official figures.

Released by Statistics Centre - Abu Dhabi, SCAD, the figures showed that the CCI decreased by 0.4 per cent in the first quarter of 2020 compared with the fourth quarter of 2019. The index decreased from 98.4 per cent in the fourth quarter of 2019 to 98.0 per cent in the first quarter of 2020.

Prices of ‘Manpower’ group decreased by 2.8 per cent in the first quarter of 2020 compared with the first quarter of 2019, while prices of groups of construction materials and mechanical works — A/C decreased by 2.6 per cent and 2.2 per cent respectively.

The Construction Cost Index is an important statistical indicator for the purposes of planning and research in various disciplines.

The report covers only the relative importance of each one of the main construction groups for towers, SCAD said. It added that further development of the index will add the rest of the construction sectors, according to the construction classification used in the Emirate of Abu Dhabi.

Abu Dhabi’s Construction Cost Index (CCI) increased year-on-year by 0.5% in Q4 2019, according to the Statistics Centre - Abu Dhabi (SCAD) in its Q4 2019 report.

The index increased from 97.9% in Q4 2018 to 98.4% in Q4 2019, the report noted.

According to the report, the Construction Cost Index (CCI) is an “important statistical indicator” for the purposes of planning and research in various disciplines.

Statistics centres and agencies in different countries consistently compile these indices, based on the prices of a group of building materials and construction services commonly used during the construction process.

The figures calculated constitute a time series that provides a measure of changes in the cost of construction over time.The ‘services’ group contributed to the overall increase in prices in the Q4 2019, compared to the same period in 2018.

Producer Price Index: In the first quarter of 2020, the Producer Price Index, PPI, increased by 1.9 per cent from 76.3 per cent in the fourth quarter of 2019, to 77.7 per cent, according to figures released by Statistics Centre - Abu Dhabi, SCAD.

The report for the first quarter of the year showed that the PPI in the first quarter of 2020 decreased by 0.5 per cent compared with the same quarter in 2019, from 78.2 per cent in the first quarter of 2019 to 77.7 per cent in the first quarter of 2020.

Comparing the figures of the first quarter of 2020 with the fourth quarter 2019, the activity of ‘Manufacture of coke and refined petroleum products’ for which prices increased by 5.4 per cent, contributed 80.8 per cent to the overall change. In addition, the activity ‘Manufacture of chemicals and chemical products’ contributed 15.1 per cent to the overall change, for which prices increased by 2.7 per cent, the report noted.

Prices of the ‘Manufacture of electrical equipment’ group decreased by 6.5 per cent during the first quarter of 2020 compared to the fourth quarter of 2019, and contributed 15.1 per cent in reducing the overall increase.

The PPI covers the manufacturing sector and its design is based on the main list of products of the industrial manufacturing activities in the International Standard Industrial Classification-revision 4, ISIC4, which covers all manufacturing economic activities.

The overall real GDP of UAE is estimated to have grown by 1.7 per cent in 2019, according to the Central Bank of the UAE.

“The UAE hydrocarbon sector is estimated to have exhibited a growth of 3.4 percent in 2019. However, non-oil activities advanced at a softer pace growing by 1.0 per cent. As a result, overall real GDP is estimated by FCSA (Federal Competitiveness and Statistics Authority) to have grown by 1.7 per cent in 2019,” said the financial regulator in its Annual Report 2019.

“The spread of COVID-19 is expected to impact trade and supply chain movements, coupled with travel restrictions which paves way for high volatility in capital markets and commodity prices. While the outbreak is expected to negatively affect the global and domestic economies, it is still early to gauge the scale of the economic fallout,” the report added.

The report noted that the higher hydrocarbon output, as well as growth in non-hydrocarbon economic activity, supported the pace of the country’s overall economic growth in 2019.

WAM