TBC Capital published a report on Construction Sector at a Glance.
According to the document, construction costs in Georgia have increased significantly since 2019, with especially sharp growth in 2021-2022. The construction cost index (CCI) increased by 23% annually in 2022. In 2023-2024 the construction cost inflation relatively stabilized with moderate growth figures.
Initial cost increase was driven by construction materials, reflecting pandemic and war-related price spikes. However, more recently, in 2023-2024, labor costs have become the main driver.
Soaring wages have contributed significantly to increased total construction cost. The rapid growth in remuneration and a noticeably decreasing number of persons employed in construction signals skilled labor shortage. Meaning, the labor related issues could be a key challenge for the sector currently.
