India Construction Cost Trends 2023: Ushering in an Era of Normalization

Post Covid, the construction industry has witnessed notable fluctuations in the prices of key input materials, leading to a significant impact on the overall construction costs. However, there has been some normalization in growth in 2023, as reduced inflationary pressures have provided some relief in input material costs. Nonetheless, key components such as cement, steel, and aluminium have shown divergent price trends in 2023.

Change in materials prices between Q3 2022 and Q3 2023

Note: The % change is calculated at an India level, taking into account respective material prices across major cities.

• Looking ahead, growth in construction costs is expected to normalize, driven by a convergence of favorable factors. The market tends to find a new equilibrium as supply and demand dynamics, backlog levels, labor wages, and commodity pricing reach a balance.
• This report is the 2023 edition of our Construction Cost Trends series, examining the fluctuations in key input material costs and greenfield construction costs across different asset classes. We have also provided an update to our input material cost index to assess price movements across major cities. 
• The report also provides a glimpse into the movement in fit out costs across segments, and the impact that  sustainable construction practices can have on costs.

To gain valuable insights into the movement of construction costs across sectors and cities in India, please download using the link on the right.