Supply problems are creating major delays and threatening the financial health of construction sector firms, the Federation of Craftsmen (Fédération des Artisans) has warned. Library picture: Gloves and spatulas are seen during a groundbreaking ceremony in February 2018. Photo credit: Nader Ghavami/Maison Moderne
Luxembourg’s construction sector is being threatened by rapidly rising material prices and serious supply shortages, a trade group has warned.
The Federation of Craftsmen (Fédération des Artisans) said on Tuesday that costs and delivery delays have become “increasingly urgent” since the end of last year.
Several construction projects have been delayed because materials have been out of stock, which creates additional delays while other artisans wait for their subsequent step in the building process.
The group did not mention any specific construction projects in its statement, nor did it give examples of rising prices, which it described as “explosive”.
Unpredictable prices will create financial pressure on construction firms, the federation stated. Higher supplier costs will need to be calculated into future contracts, but current projects have not budgeted for the recent rises.
The federation said it already started discussions with François Bausch, the infrastructure minister (Green party), “to find solutions in the public sector.”
The group said the entire construction sector has been impacted. Suppliers of metal, wood, plastic and stone materials have all experienced shortages.
The group blamed the pandemic for part of the problems. Production capacity was reduced and staff made redundant during the crisis, due to several months of low demand last year.
But European vendors are also exporting more to China and the US, instead of supplying local firms, according to the federation. Rising transport prices and the recent Suez Canal blockage have not helped either.