Building input cost tracker
The three price indices Stats NZ publishes for the construction sector — inputs, outputs and labour — shown since 2015 so you can see the 2022 surge clearly and where costs sit now.
Three construction price indices (2015 Q1 = 1000)
PPI measures what builders pay for inputs. CGPI measures what new buildings sell for. LCI measures what construction workers earn. Gaps between them show where margins are expanding or compressing.
Annual change (%) — the 2022 surge in context
Input costs spiked almost 15% YoY through 2022. Output prices followed with a lag. Labour costs have been the slowest to respond and the last to slow.
What each index actually measures
The Producers Price Index for construction inputs tracks the cost of the goods and services builders buy to build with — timber, concrete, steel, plaster board, fixtures, subcontracted trades. It is the most direct measure of cost pressure on the sector. When it rises sharply — as it did in 2022, when timber and steel prices spiked globally — builders either pass the cost through to clients or absorb it as compressed margins.
The Capital Goods Price Index for buildings measures the price of a new completed building. It is the output equivalent of the PPI. When it rises, existing property-owners gain (their building is notionally worth more) and first-home buyers lose (new houses cost more). It typically lags the input index by a quarter or two — builders take time to push costs through.
The Labour Cost Index for construction measures wage growth for construction workers holding job content constant. It is the pure pay-rate signal, stripped of composition effects (i.e., if high-paid workers retire and are replaced with low-paid ones, LCI doesn’t move — only actual pay-rate changes do). Construction wages have been among the fastest-growing in the NZ economy since 2021.
What the gaps tell you
When input costs rise faster than output prices — as happened through 2022 — builders’ margins get squeezed. That is one reason a number of large NZ construction firms collapsed or restructured in 2023: they had signed fixed-price contracts before the input surge, and delivered them afterwards, at a loss.
When labour costs rise but input costs don’t, margins shift more subtly. Higher wages in construction relative to other sectors tend to pull workers in from adjacent industries (manufacturing, transport), which is part of why NZ construction headcount grew from around 155,000 in 2015 to a peak of over 245,000 in early 2023. The slowdown since then has reversed a portion of that reallocation — see the Construction sector jobs tracker for detail.
Related trackers
Compare alongside: Consents vs Work Put in Place and Construction sector jobs tracker. Return to the main Building Consents dashboard.