France’s consumer prices edge up in March, annual inflation steady at 0.8%

France’s Consumer Price Index (CPI) rose by 0.2% in March 2025 compared to the previous month, following a stable reading in February, according to final data released by INSEE. On an annual basis, the inflation rate remained unchanged at 0.8%.

The monthly increase in prices was driven mainly by seasonal factors, notably higher prices for manufactured goods (+1.1%), especially clothing and footwear (+5.7%). Food prices also rose slightly (+0.3%) after a minor decline in February, while service prices remained stable. Energy prices, however, continued to fall, decreasing by 1.5% month-on-month, largely due to lower petroleum product costs.

When adjusted for seasonal variations, consumer prices fell by 0.2% in March, following a 0.5% drop in February.

Year-on-Year Trends

On an annual basis, headline inflation was held at 0.8% for a second consecutive month. This figure reflects a mix of contrasting price movements across major categories:
• Energy prices declined by 6.6% year-on-year, led by drops in diesel (–7.8%), petrol (–7.2%), and electricity (–12.8%). In contrast, gas prices increased sharply by 18.9%.
• Manufactured product prices fell by 0.2%, with health products declining by 1.4%. Clothing and footwear saw a modest rise of 0.5%.
• Service prices increased by 2.3%, largely driven by insurance costs, which rose 11.6%. Other service categories such as accommodation and cultural services recorded slower price growth.
• Food prices saw a slight acceleration to +0.6% annually, supported by higher prices for fresh produce (+3.8%). Non-fresh food items saw smaller increases, while dairy products posted a continued but slowing decline (–0.8%).

Core Inflation and HICP

Core inflation, which excludes volatile items such as energy and fresh food, remained stable at 1.3% year-on-year. The Harmonised Index of Consumer Prices (HICP), used for EU comparisons, also increased by 0.2% month-on-month and remained at 0.9% annually.

Revised Figures

The final CPI and HICP figures for March confirmed the provisional estimates released at the end of March, with no revisions in either the monthly or annual inflation rates.

Source: Insee

Construction costs in Sweden show slight monthly increase, annual decrease in March 2025

In March 2025, Sweden’s Construction Cost Index (CCI) for multi-dwelling buildings experienced a modest month-on-month rise of 0.4%, while registering a 0.3% decrease compared to March 2024. This marks the second consecutive month of annual decline, following a 0.6% drop in February. 

Monthly Developments

The monthly uptick was primarily driven by a 0.6% increase in contractors’ costs, which constitute 82% of the total index. In contrast, construction clients’ costs, accounting for the remaining 18%, decreased by 0.3%. 

Within contractors’ expenses, the ‘transport, fuel, and electricity’ category saw a 1.9% increase, with electricity prices rising by 5.4% and diesel oil by 3.3%. Building material costs also went up by 0.8%, notably with painting materials increasing by 8.5% and wood products by 2.7%. 

Annual Trends

Year-over-year, contractors’ costs rose by 2.8%, while construction clients’ costs declined by 10.5%, influenced by a 23.5% reduction in interest expenses. Among building materials, wood products and painting materials experienced the most significant annual increases, at 9.3% and 8.4% respectively. 

These figures suggest a stabilization in construction costs, with material prices exerting upward pressure, while reduced financing costs for clients contribute to the overall annual decrease.

Source: SCB-Statistics Sweden

Christoph Schmidt appointed Managing Director of Drees & Sommer Hungary

Drees & Sommer, an international consulting firm specialising in real estate, industrial, and infrastructure projects, has appointed Christoph Schmidt as the new Managing Director of its Hungarian operations. He takes over from Philipp Gansch, who will now focus on corporate and business development across several European markets, including Hungary, as part of the Drees & Sommer Group partnership.

Schmidt will work alongside Ákos Koloszár, who continues to manage the company’s activities in Hungary. In his new role, Schmidt will focus on leading industrial projects, with an emphasis on the automotive sector, while also contributing to the company’s broader regional and international project coordination.

Before this appointment, Schmidt served as Lead of Automotive for Central and Eastern Europe (CEE) and Austria. His work has included projects in automotive production, retail, and mobility for both global brands and local firms. Since joining Drees & Sommer in 2017, he has primarily worked with the Austrian branch as a Senior Project Manager, managing industrial and real estate projects and maintaining relationships with key accounts.

Drees & Sommer’s services in Hungary include support in process and plant planning, Smart Factory supply concepts, business case analysis, digitalisation strategies, and e-mobility infrastructure. The company operates in both greenfield and brownfield development contexts, providing advisory and implementation services across sectors.

Schmidt stated that his goal is to strengthen Drees & Sommer’s presence in Hungary’s automotive and industrial sectors by drawing on experience from Germany and Austria, while tailoring solutions to meet the specific needs of the Hungarian market.

Czech mortgage market sees strong spring growth as interest rates continue to decline

The Czech mortgage market experienced a notable increase in activity in March 2025, supported by a continued decline in interest rates, according to the latest ČBA Hypomonitor report. Banks and building societies issued CZK 27.2 billion in new mortgage loans during the month—a 29% rise compared to February.

The average mortgage interest rate fell slightly to 4.68%, down from 4.72% in February and 5.19% in March 2024. This gradual decline in rates has helped reduce monthly repayments for borrowers by around CZK 1,200, or approximately 1.4% of an applicant’s net income.

The number of new mortgage contracts reached 6,680 in March, up 47% year-on-year. Seasonally adjusted, this represents one of the highest monthly levels recorded over the past three years. Refinanced mortgages—including both external and internal refinancing—amounted to CZK 5.7 billion, contributing to a total mortgage market volume of CZK 32.8 billion for March.

Mortgage Rate Trends

The average mortgage rate of 4.68% in March represents a year-on-year decrease of 0.51 percentage points. Compared to the 2024 average of 5.07% and the 2023 rate of 5.81%, the reduction translates into notable savings for borrowers. However, despite lower interest rates, the rise in average mortgage amounts has pushed up overall monthly repayments. The average mortgage in March was CZK 4.07 million, about 19% higher than in March 2024.

Impact on Monthly Repayments

Due to the higher loan amounts, the average monthly repayment in March rose by approximately CZK 1,300 compared to 2024. For borrowers taking out a CZK 1 million mortgage with a 30-year term, the typical monthly payment at current rates is around CZK 5,200. By comparison, borrowers with similar loans issued in 2019 at rates near 2.8% paid about CZK 1,800 less per month.

Market Outlook

If the momentum of the past two months continues, the volume of new mortgages in 2025 could reach CZK 291 billion, exceeding 2024’s CZK 228 billion by more than 25%. This would place annual mortgage activity at a midpoint between 2020 and the record-setting year of 2021.

Economists warn that future developments will depend heavily on external economic conditions. Petr Gapko, Chief Economist at MONETA Money Bank, noted that uncertainties in global trade policy—particularly U.S. tariffs—could impact future interest rate decisions.

Market interest rates, including three- and five-year swaps, rose slightly in March, partly due to stronger-than-expected inflation in services. Still, Czech interest rate swaps remained about 20 basis points lower in early April, which could create further room for mortgage rates to fall below 4.3% later this year.

Longer-Term Trends

Throughout 2024, the mortgage market rebounded strongly. Banks and building societies issued CZK 228 billion in new loans—an 83% increase compared to 2023. Refinancing added CZK 47 billion, bringing the total mortgage market volume for the year to CZK 275 billion.

Despite the market’s recent strength, the current average mortgage amount is now 11% higher than in 2024, suggesting continued pressure on affordability, even as rates fall.

Source: CBA-Czech Banking Association

UK labour market shows signs of cooling amid strong wage growth

The UK’s labour market exhibited signs of deceleration in early 2025, according to the latest data released by the Office for National Statistics (ONS) on April 15. While wage growth remained robust, indicators such as employment levels and job vacancies pointed towards a potential slowdown.

Employment Trends

In March 2025, the number of payrolled employees in the UK decreased by 78,000, marking the most significant monthly decline since the COVID-19 pandemic. This followed a revised decrease of 8,000 in February. Despite these reductions, the unemployment rate held steady at 4.4%.

Wage Growth

Average weekly earnings, excluding bonuses, increased by 5.9% in the three months to February 2025 compared to the same period a year earlier. This growth was slightly above the 5.8% recorded in January. Including bonuses, wage growth remained at 5.6%. Public sector pay was a significant contributor to this increase, while private sector wages showed relative stability.

Job Vacancies

The number of job vacancies fell by 22,000, bringing the total below pre-pandemic levels for the first time since mid-2021. This decline suggests a cooling in the demand for labour across various sectors.

Economic Outlook

The combination of strong wage growth and declining employment indicators presents a complex scenario for policymakers. While higher wages can boost consumer spending, they may also contribute to inflationary pressures. The Bank of England faces the challenge of balancing these factors as it considers future interest rate decisions.

Additionally, upcoming changes such as increases in employer national insurance contributions and the national living wage are expected to impact employment costs. These factors could influence hiring decisions and overall labour market dynamics in the coming months.

The ONS has acknowledged concerns regarding the accuracy of its labour market data, citing declining response rates to its surveys. Efforts are underway to implement a Transformed Labour Force Survey (TLFS) to enhance data quality, with full implementation anticipated by 2027.

As the UK navigates these labour market developments, close monitoring of employment trends and wage dynamics will be crucial in informing economic policy and ensuring sustainable growth.

US troops leave Jasionka base: Implications for Poland and regional security

After three years of deployment, US forces have withdrawn from the Jasionka base in southeastern Poland, near the Ukrainian border. In January, the US military also removed the Patriot missile batteries that had been stationed to protect the base and airport. Paratroopers from the 82nd Airborne Division have since departed, and responsibility for the base is now being transferred to NATO forces.

Jasionka has played a key role as a logistics center for the delivery of American military equipment to Ukraine. While the US has not confirmed a full withdrawal from Poland, the move has sparked discussion about the future of American military presence in the region, particularly given the base’s symbolic and strategic importance.

Reports from the Financial Times and NBC News suggest that the Pentagon is considering a broader reduction of troops in Poland and Romania by about 50 percent. The potential changes are part of a resource reallocation strategy under the Biden administration. However, some sources indicate that the current withdrawal is part of a routine rotation rather than a permanent drawdown.

American forces remain active in other parts of Poland, especially in the western and northern regions, and the strategic partnership between the US and Poland continues. Still, the removal of troops from Jasionka may raise concerns about the level of ongoing US support for Ukraine and the security posture along NATO’s eastern flank.

While the withdrawal does not mark a full disengagement, it underscores the need to reassess long-term security arrangements. These may include a combination of troop deployments, joint infrastructure development, and diplomatic cooperation. Maintaining strong alliances and open communication will be key to preserving regional stability.

Source: WEI

Paulina Petynka appointed Director of Commercial Space Leasing at Yareal Polska

Paulina Petynka has joined Yareal Polska as Director of Commercial Space Leasing. In her new role, she will oversee the leasing strategy for office and retail space within the company’s portfolio, with a particular focus on the LIXA office campus and the SOHO by Yareal mixed-use development.

Petynka brings over two decades of experience in the real estate industry. Prior to joining Yareal, she spent seven years at Colliers, where she served as Associate Director in the landlord representation department. There, she supported and coordinated leasing strategies for major clients. Her previous roles include Leasing Manager at Metro Properties, where she handled leasing for nine M1 shopping centres in Poland, and a twelve-year tenure at Centrum Zana, an office developer based in Lublin. At Centrum Zana, she leased approximately 60,000 square metres of office space and participated in a significant transaction involving the sale of three office buildings to First Property Poland.

Her expertise covers strategic consulting, leasing strategy development, contract negotiations, and marketing consultancy. She has also managed the commercialisation and rebranding of both new and existing office buildings.

In a statement, Paulina Petynka said she looks forward to working on projects that offer both high standards and practical solutions aimed at meeting evolving tenant needs.

Yareal Polska’s commercial portfolio includes several Warsaw-based properties, such as the LIXA campus and the SOHO by Yareal complex, which will feature over 11,300 square metres of space designated for retail and services. The company also manages the Wspólna 47/49 office building on behalf of YAM Invest, comprising approximately 7,800 square metres of space in central Warsaw.

Construction costs in Austria continue to rise in March 2025

Construction costs in Austria remained above the previous year’s level in March 2025, according to preliminary data released by Statistics Austria. The index for residential building construction rose by 3.3% compared to March 2024, reaching 129.6 index points. This represents a slight monthly increase of 0.2% over February 2025.

Civil engineering costs also showed year-on-year increases across all measured sectors. The index for road construction was up 1.1% from March 2024, reaching 135.5 index points, although this marks a 0.2% decrease from February. Bridge construction costs rose by 2.2% year-on-year to 130.0 index points and increased by 0.2% month-on-month. Sanitary engineering costs were 2.7% higher than a year earlier, at 132.6 index points, with a slight monthly decline of 0.1%.

The construction cost indices reflect changes in the cost of materials, energy, transportation, wages, and machinery used in construction. These figures do not represent the final prices paid by clients but rather the costs borne by construction companies in the execution of work.

Wholesale prices in Germany rose by 1.3% year-on-year in March 2025

According to the Federal Statistical Office (Destatis), wholesale selling prices in Germany were 1.3% higher in March 2025 compared to the same month in 2024. This follows annual increases of 1.6% in February and 0.9% in January. On a monthly basis, wholesale prices in March 2025 decreased slightly by 0.2% from February.

The year-on-year rise was primarily driven by higher prices in the wholesale of food, beverages, and tobacco, which increased by 4.4%. Notable price increases were recorded for coffee, tea, cocoa, and spices (+43.5%), as well as for sugar, confectionery, and bakery products (+16.3%). Prices for milk, dairy products, eggs, and edible fats and oils were also up by 9.3% compared to March 2024.

Wholesale prices for non-ferrous ores, non-ferrous metals, and related semi-finished products increased by 27.3% year-on-year.

In contrast, wholesale prices fell in several product categories. Prices for computers and peripheral equipment were down by 5.6%, while those for iron, steel, and ferrous semi-finished metal products declined by 5.4%. Prices also dropped for live animals (-3.2%) and mineral oil products (-3.0%).

Further details, including long-term data and statistical tables, are available in the wholesale price index section of the GENESIS-Online database and the Dashboard Germany platform, both maintained by Destatis.

Poland’s foreign trade records negative balance in early 2025 amid decline in exports

Poland’s foreign trade turnover in goods during January and February 2025 showed a mixed performance, according to new data released by the Statistics Poland (GUS). While total imports rose modestly year-on-year, exports fell, resulting in a negative trade balance for the two-month period.

At current prices, total exports amounted to PLN 240.7 billion, a 5% decline compared to the same period in 2024. Imports, in contrast, rose by 1.1% to PLN 245.7 billion, leading to a trade deficit of PLN 5 billion. This shift marks a reversal from the previous year, which had registered a positive balance.

When expressed in foreign currencies, exports stood at USD 59.2 billion (a 6.8% drop), while imports reached USD 60.5 billion (down 0.9%), producing a USD 1.2 billion deficit. In euro terms, exports totaled EUR 56.6 billion (down 2.7%) and imports EUR 57.8 billion (up 3.4%), also resulting in a EUR 1.2 billion shortfall.

Shift in Trade Dynamics by Country Group

Developed countries remained Poland’s primary trade partners, accounting for 86.9% of exports and 63.7% of imports. Within this group, European Union countries represented the largest share—73.6% of exports and 51.6% of imports. Despite this continued dominance, the share of EU countries declined slightly from a year earlier.

Poland recorded a trade surplus with developed countries (PLN 52.7 billion) and with countries in Central and Eastern Europe (PLN 6.7 billion). Conversely, trade with developing countries resulted in a significant deficit of PLN 64.4 billion.

Export and Import Trends by Country

Exports declined to most major trading partners except the United States, Slovakia, the United Kingdom, and Ukraine, which saw modest increases. Exports to the United States rose by 7.5%, making up 3.6% of total exports, while imports from the U.S. jumped by nearly 15%, resulting in a PLN 4.5 billion trade deficit.

Germany remained Poland’s largest trade partner, accounting for 26.8% of exports and 18.6% of imports. However, exports to Germany fell by 7.1% and imports by 7.4%, slightly narrowing the trade surplus with the country to PLN 18.6 billion.

Other notable import increases were recorded from South Korea (up 32.6%), Denmark (up 22.5%), and China (up 13%). The overall share of the top 10 trading partners was 66.3% of exports and 61.2% of imports.

Commodities and Sector Performance

Exports saw growth in only three commodity sections: food and live animals (up 6.1%), crude materials (up 0.3%), and miscellaneous goods not classified elsewhere (up 18.8%). Declines were recorded in machinery and transport equipment (down 9.9%), mineral fuels (down 20.2%), and several other categories.

On the import side, six commodity groups posted year-on-year increases. These included miscellaneous manufactured articles (up 14.2%), beverages and tobacco (up 9.2%), and food and live animals (up 5.2%). Declines were noted in mineral fuels (down 9.1%), machinery and transport equipment (down 4.2%), and others.

Imports by Country of Consignment

By country of consignment, developed countries accounted for the majority of imports (PLN 185.2 billion), with EU countries contributing PLN 163.2 billion. Imports from developing countries increased sharply, reaching PLN 56.4 billion.

Germany remained the largest country of consignment, followed by China, the Netherlands, and the Czech Republic. Imports from the United States and China also registered notable increases, with the U.S. gaining in relative importance despite a smaller share than European partners.

Outlook

The early 2025 trade data highlights a challenging period for Polish exports, particularly to EU markets, amid broader global economic uncertainties. Rising imports—especially from non-European countries—are contributing to a growing trade deficit. The data points to shifting trade dynamics and underscores the importance of diversifying export markets and boosting domestic competitiveness in key sectors.

Source: GUS

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