Econometric Assessment of Financial and Economic Factors Driving Construction Project Cost Growth

The article uses econometric methods to assess the financial and economic factors behind construction cost growth. First, using monthly data for 2021–2026 (n = 66), construction and installation prices are regressed on consumer prices, material prices, wages and import prices with Newey–West standard errors (R² = 0.903). Second, using panel data for 14 regions in 2012–2022 (n = 154), fixed- and random-effects models estimate the effect of financing on real output and construction costs. Materials account for 41.3%, the exchange rate for 29.7% and wages for 22.4% of cost growth, while 27.9% of additional financing is absorbed by price increases.