22.08.2022
The prices for building materials continue to annoy contractors and consumers.
More than strong was the concern expressed by the Federation of Construction Contractors Associations of Cyprus (OSEOK) in a recent fact sheet which characteristically indicated that the construction sector is in a state of uncertainty as it faces for the second year in a row an unprecedented, huge increase in the prices of materials and transport, which increases the total cost of projects up to 30%.
At the same time, the Federation is sounding the alarm, warning that the risk of non-fulfillment of existing contracts and the suspension of work is now visible.
According to the latest data, the building materials price index for July 2022 was 134.51 points (based on 2015 = 100), recording an increase of 0.09% compared to June.
However, compared to July 2021, the index recorded an increase of 17.52%. For the main categories of goods, an increase was recorded in metal products (21.50%), minerals (16.35%), wood, insulating, chemical and plastic products (16.17%), mineral products (15.76%) and electromechanical products (11.90%).
The largest growth for the year, reaching 30%, was recorded in the cost of plastic products.
In addition, the growth of ceramic products, as well as products made of aluminum and other metals, amounted to about 26%.
The annual increase in powders was more than 22%, while the prices of iron and steel products are estimated to have increased by 19%.
The cost of aggregates increased by more than 17%, while the increase in the cost of wood products amounted to 16%.
The smallest increase (2.73%) was registered in the area of heating and cooling, followed by chemicals (6.66%) and insulation materials (6.82%).
It is worth noting that as of July 2022, there was no price reduction for any material compared to July last year.
The only decline since June 2022 has been in iron and steel products, where costs appear to have fallen nearly 2% on the month.
What do contractors say?
A recent survey conducted among contractor companies, although not recent, nonetheless more than reveals the prevailing market situation.
In particular, the Federation of Construction Contractors Associations of Cyprus (OSEOK) launched a survey between 11/11/2021 and 11/19/2021 among the members of its provincial associations in order to provide a real picture from the contractor’s point of view.
From a study in which 115 contractors took part, it can be seen that the increase in the cost of purchasing materials even exceeds 50%.
In particular, 44.3% of respondent contractors responded that the increase in the purchase cost of materials reached up to 30% compared to the corresponding period in 2020.
37.4% stated that the increase in the cost of building materials reached 20%, 8.70% found an increase of up to 50%, and 4.30% reported that the increase in the cost of purchasing materials exceeded 50%.
OSEOK estimates that construction costs have risen between 22% and 25% over the specific period.
