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26.
must be treated with some reservation, they do provide a rough indication
of movements in overall building and construction costs.
Table 27, Diagram 8 J
54.
Movements in construction costs should not be seen entirely as
attributable to domestic demand conditions. Nevertheless, the increase
in world prices of construction materials was responsible only for roughly
40% of the increase in the labour and material index between 1970 and 1974;
increases in building and construction wages, solely due to domestic demand,
accounted for the rest (see paragraph 84 on price movements of selected
building materials and paragraph 79 on wage movements for construction
labour).
55.
In 1975 compared with 1974, material prices fell more rapidly
than money wages. The tender price index dropped more sharply than the
labour and materials index, possibly as a result of lower profit margins,
but higher productivity induced by a slack labour market and expectations
of a further price drop in property may also have been important.
Increases
in demand for building and construction reversed the decrease in the tender
price index in the third quarter of 1975 and in the labour and material
index in the fourth quarter of 1975.
55.
The labour and material index accelerated during 1976, it
increased during the first, second and third quarters at an annual rate
of 9%, 11 and 15% respectively. On the other hand, the tender price
index for public building projects for all the four quarters in 1976,
although higher than in the corresponding quarters of 1975, did not show
any acceleration, possibly because the total demands on the industry were
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