PSI - Issue 64

Rubina Canesi et al. / Procedia Structural Integrity 64 (2024) 1712–1719 Author name / Structural Integrity Procedia 00 (2019) 000 – 000

1713

2

The present study focuses specifically on the design and construction phases of large-scale projects, aiming to evaluate their economic sustainability through the lens of cost management tools. Construction projects entail significant economic considerations, particularly during the design and construction phases. During these stages, the estimated construction costs undergo numerous alterations and fluctuations, influenced by various factors inherent in project development and inevitable variations. Having early insights into prospective costs with a high degree of accuracy during the initial decision-making stages is paramount to the success of a project and mitigates the risk of delays, commonly known as time overrun, in subsequent phases. To mitigate the risk of future cost overruns, cost assessments must be as accurate and predictive as possible. This necessitates the development and utilization of robust cost management tools that can provide reliable estimates throughout the project lifecycle, aiding in effective decision-making and project management. The construction producer price index (CPPI) measures the prices of newly residential constructed buildings from the building constructor’s point of view. The CPPI and its annual growth rate are presented in Fig. 1 (a; b). The CPPI annual growth rate is calculated over the variation of the CPPI. Figure 1b provides the annual growth rates for Europe and for some of the EU Member States, between 2011 and 2022, which have similar trends. Between 2005 and mid 2008, construction producer prices and costs for residential buildings in the EU experienced a steady increase (Figure 1a). However, following a peak in the third quarter of 2008, these indices began to decline, reaching their lowest point about a year later. Despite this, the overall decrease wasn't particularly significant. By 2010, both price and cost indices started rising again and within a year, they had returned to pre-financial crisis levels. Until 2012, these indices continued to rise before stagnating between 2012 and 2016. Another period of continuous increase began thereafter (Eurostat, 2024). The impact of the COVID-19 crisis on CCPI was relatively muted during the first and second quarters of 2020. However, in 2021, a significant uptick in growth occurred, primarily propelled by rising costs of input materials (Figure 1a). This trend persisted into 2022. Between the first quarter of 2021 and the last quarter of 2022, CCPI saw an increase of approximately 19%, to reach an increase by 22% in the last available index in 2023. From 2011 to 2016, the EU's CCPI experienced a modest annual increase of around 1.1%. Over the subsequent three years (2017 to 2019), prices climbed more notably, reaching an average annual increase of almost 3.0%. Although the annual data for 2020 did not reveal a dramatic impact of the COVID-19 pandemic, there was a slight moderation in price increases compared to previous years. In 2021, prices surged significantly in the majority of countries, with double digit growth rates averaging 5.6% in Europe. This upward trajectory accelerated in 2022, with a large majority of countries experiencing double-digit price increases, resulting in an average increase of 11.9% across Europe.

a.