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Cost To Build In Fiji Analysed

Cost To Build In Fiji Analysed
Members of the Muanaicake Village Youth Club celebrate the completion of their new footpath, the first of three projects in a five-year plan. Photo: Losirene Lacanivalu
October 11
10:06 2014

The provisional data for the (All Items) Building Material Price Index (BMPI) for the September third quarter 2014 stood at 119.1.
Comparison with the June second quarter 2014, it shows an increase of 2.3 per cent.
The percentage indicates the average changes in the prices of building materials purchased at a specific timeframe such as monthly or yearly.
The mentioned was for last three months compared to the previous three months. The index was constructed in 2008 as the base or starting point of 100.
The index comprises of a fixed basket of building materials whose prices are continuously monitored and reported.
Therefore the higher the number means cost of building is increasing or vice versa.
The prices for building materials remained high for the first three quarters of 2014 as depicted in the graph.
The construction and the investment spending also remained firm.
The new investment lending which comprises of lending to the real estate and building & construction sectors also grew by 6.7 per cent in August.
Moreover, there was no changes in the price of Window Frames and Door.
The only building material which recorded a lower price was mosaic floor and glazed ceramic tiles by 2.9 per cent.
A surprise as the prices of tiles are not under price control, so its reduction is a relief.

A national interest
Construction and building materials will be of interest in the 2015 National Budget.
As consumers can benefit from the exemption or reduction of fiscal and import duties on construction materials.
However, these don’t necessarily have a positive impact on the Fiji economy and its consumers.
Mainly because the onus remains with business owners to pass on the benefits and because government has already reduced certain items like Concrete and Iron from 32 per cent to three per cent via fiscal duty.
The second factor remains with global supply and demand chain.
Meaning we have no control on items of scarcity from a global perspective example in steel.
Therefore we have imported inflation which is due to goods and services not manufactured in Fiji.
The third key factor affecting the price of imports is the exchange rate.
As such, the current strength in the USD will keep construction materials and steel high. Current FJD exchange rate against USD is at 0.5098 (8/10/14) compared to previous month 0.5279 (1/9/14)
This is an informative publication, sponsored by the Fiji Sun, Fiji Bureau of Statistics and HFC Bank. All views expressed or implied are purely of the Treasurer at HFC Bank, Peter Fuata.


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