Rising raw material prices are hitting the construction industry hard, and the effects are often passed on to customers. The link between raw material shortages and price hikes is becoming increasingly clear.
This trend is confirmed by the latest Statec data in relation to the construction price index, which rose by 4.3% between October 2020 and April 2021.
Prices within the 18 trades that make up the index are all up. “This is the strongest half-yearly evolution observed since 1992,” Statec reports in its analysis.
This exceptional increase is mainly attributable to a surge in the price of building materials. Over one year, prices in residential construction are up by 5.2%.
The same carpentry, just 13.6% more expensive
More precisely, structural construction—which has the highest weighting in the index—shows a half-yearly increase of 4.9% in April 2021. “The increase in transport costs and the rise in the price of iron and various plastic products at the beginning of the year are responsible for this unusual development,” according to Statec analysts.
Trades to do with roofing showed the biggest increase with a rise of 7.3% in the half-year comparison. “The soaring price of wood means that building owners will have to pay 13.6% more in April 2021 for carpentry than in October 2020,” explains Statec.
The “building enclosure” trades, which include windows with sun protection, garage doors and facades, are also up by 4.6%, i.e. more than the general index.
Here too, Statec points out that “the companies in the survey justify all these price increases with the rising costs of certain materials, particularly wood, aluminium, glass and insulation.”