Building costs are up 4.3% in a year — and it is fuel and wages, not materials, doing the pushing

The National Statistics Office of Georgia reported on 7 September that its construction cost index rose 0.8% in July from June and 4.3% from July 2025. Measured from February 2022, costs are up 30.3%. The monthly rise came almost entirely from a 6.4% jump in average construction-sector wages. Over the full year, the biggest single driver was the cost category covering transport, fuel and electricity, up 15.2%, followed by construction wages, up 3.6%.

The segments tell different stories. The residential index fell 1.3% in July and was only 0.5% higher than a year earlier. Non-residential costs rose 5.1% in the month and 8.2% on the year, and civil works — roads, networks and similar — were up 6.4% annually. Building materials, the category most people assume drives prices, were 0.5% cheaper than in June and only 0.8% dearer than a year ago.

For residential developers, the index does not support a cost-driven case for sharp price rises this year: their input costs grew more slowly than general inflation. The pressure points are labour and energy, both of which are harder to lock in through supplier contracts than materials. Mixed-use and commercial schemes carry more cost risk than pure housing. Buyers comparing off-plan quotes should remember that one month's index can swing either way; the annual figures are the more reliable guide.