Why building material costs are rising
Businesses must order sufficient stocks when prices of building materials are rising
The recent few weeks in a row have seen a bullish trend for prices for all building materials. The overall sentiment in the developing economies of India, Turkey, China and the MEA region helped push up these prices.
Steel prices have gone up by approximately 25 per cent. Prices of sanitary fittings are also on an upward trajectory. Prices of brassware are up by 10 per cent and zinc by 15 per cent. Costs of stainless steel sinks and hardware products are also seen increasing by 15 per cent. Ceramic tiles, plywood, and timber prices have increased by 10 per cent and electrical products by five per cent.
“There is a host of reasons behind this trend,” says Anis Sajan, managing director of Danube Group. “The recent crackdown by pollution control agencies in China has led several unorganized and small businesses to shut down. This has led to a significant quantity of products being ousted from the market. However, more businesses have come back to the organized sector, and quality of the products has improved and prices are now in tandem with the international market,” he adds.
With Expo 2020 approaching, the UAE construction market will remain robust, with projects worth of several billion dollars under construction. Sajan believes this bullish trend for building material prices will be sustained.
He advises businesses to take calculated risks and order sufficient stocks when prices of building materials are rising. “Many businesses do the mistake of ordering fewer quantities when prices are going up. This, in turn, leads to an artificial shortage and further increase in prices,” he warns.