Designers are raising prices by 15 percent due to the crisis, according to a study

Prague - Project companies have increased prices by an average of 15 percent this year due to high inflation and rising energy costs. Designers are concerned that alternative materials are being used in 36 percent of cases, which can lead to structural failures, for example. In 15 percent of cases, projects are being postponed due to enormous costs. This is according to an analysis for the second quarter of this year conducted by CEEC Research.

According to the report, 76 percent of the surveyed project companies have decided to raise their prices. "We are responding to the current wave of inflation, adjusting our employees' salaries so that they are not only competitive but also to ensure that our people's purchasing power is not diminished," said Martin Höfler, CEO and Chairman of the Board of Pudis.

According to Robert Špalek, Chairman of the Czech Chamber of Authorized Engineers and Technicians in Construction (ČKAIT), project prices have been undervalued in the long term.

Project firms face problems with long-term or multi-stage fixed-price projects that were agreed upon several years ago. However, they are now completing the work at higher costs. They are therefore trying to negotiate for value adjustment. "We are not very successful," noted Höfler from Pudis. Lucie Bohátková, Board Member and Business Director of SG Geotechnika, mentioned that negotiating an inflation clause is easier with private investors than with public investors who are not prepared for it.

According to the study, four percent of project firms have reduced prices, and twenty percent are still holding the same prices. However, it is possible that they too will raise prices. "For now, we are maintaining a similar price level as last year, but there is increasing pressure on labor costs, work efficiency, and cost reduction," stated Milan Moravec, head of Digital Transformation Systems.

Given the high prices of construction materials, cheaper solutions are required already during the design phase, according to the analysis. However, 36 percent of project companies encounter situations where the customer uses different materials than those designed during implementation. Consequently, 44 percent of the surveyed companies are concerned that these savings may lead to structural failures or other deficiencies.

On average, 11 percent of projects are canceled, and 15 percent are postponed, according to the research. One-third of the respondents have experienced project cancellations, while 60 percent have encountered postponements. A total of 121 companies were surveyed.