Construction businesses seeking bigger margins to guard against uncertainty

The rate of inflation may be slowing but price increases across hard-to-avoid expenses, such as insurance and housing, are keeping pressure on hip pockets.

Insurance prices as measured in the December quarter consumer price index rose 3.8% over the quarter to be 16.2% higher annually, which the Australian Bureau of Statistics (ABS) said was the largest annual increase in 23 years.

Compare the Market economic director David Koch said destructive weather events were partly responsible.

“Unfortunately, these wild weather events increase the risk of claims being made to insurers, so they typically up prices for everyone,” Koch said.

The elevated cost of rebuilding and repairing damaged homes, including labour and materials, was also feeding into higher costs for insurance.