Building materials, construction and the economy: how do changing costs impact households and businesses?

In the first quarter of 2025, the National Agency for Statistics and Demography (ANSD) published its Building and Public Works Cost Index (IBTP). This index reveals a slight overall increase of 0.2 % compared to the previous quarter, driven by the increase in building construction costs (+0.5 %) and specialized works (+0.8 %), despite a slight decline in civil engineering works (-0.1 %). Behind these figures, there are concrete repercussions that are being felt by households and businesses, both in the real estate sector and in the national economy.

An increase that weighs on household budgets

For households, the increase in the cost of materials, particularly rebar and steel (+3.2 %), gravel (+0.6 %), and sand (+0.8 %), directly increases the cost of building and renovating homes. This particularly affects individual housing projects and social housing programs, where budget margins are often limited. An increase of just 0.5 % in building costs, as recorded in Q1 2025, can translate into millions of additional CFA francs on a construction site, inevitably reflected in the final price of housing.

Construction companies under pressure

For construction companies and real estate developers, rising material and labor costs (+0.6 % for buildings and +2.0 % for specialized work) are putting pressure on profit margins. Ongoing projects must be reassessed, and quotes adjusted to take into account the surge in input prices, particularly cutting and shaping tools, which jumped by 7.6 % in one quarter and 15 % in one year. Civil engineering works, while generally stable (-0.1 % over the quarter), are also experiencing variations in key segments, such as roadways (-0.2 %), which may delay or increase the cost of public projects.

An impact on the national economy

Cost increases in the construction sector are having a domino effect on the Senegalese economy. On the one hand, rising material and labor prices are increasing the cost of public and private infrastructure, slowing down some development projects. On the other hand, they are stimulating the local supply chain, creating opportunities for materials producers and equipment suppliers. However, lower energy and transportation costs (-1.5% in the quarter) provide a slight counterbalance, partially easing the pressure on budgets.

How to anticipate?

For households and businesses, the key lies in anticipation. Regularly monitoring the Construction Cost Index (IBTP) published by the ANSD (French National Agency for Construction and Public Works) allows for better project planning and budget adjustments. Businesses can also negotiate long-term supply contracts or diversify their material sources to limit the impact of sudden price increases. Households, for their part, can optimize their construction plans by choosing more affordable alternatives or scheduling their projects for periods when price pressure is less.

The IBTP for Q1 2025 highlights a moderate but significant trend: rising construction costs, primarily driven by materials and labor, continue to impact the construction sector and the Senegalese economy as a whole. Companies, developers, and individuals must remain attentive to these indicators to avoid unpleasant surprises and adapt their strategies.