Builders: The prices of building materials will increase by five to ten percent

Prague - The prices of construction materials in the Czech Republic will increase year-on-year by five to ten percent next year. This is based on the results of a study by the analytical company CEEC Research, which is available to ČTK. Construction companies are already feeling the price increase this year, with 85 percent of public sector companies affected, and nearly all in the private sector. More than a hundred directors of domestic construction companies responded to the survey conducted in September.

"In the segment of construction materials, we see a critical shortage of some materials in the market, which some manufacturers are partly using to adjust previous dumping prices from the crisis period. Specifically, there is a shortage of bricks, insulation materials, as well as many others. Delivery times are, at best, in months, often longer than half a year," said the director of CEEC Research, Jiří Vacek.

About three-fifths of the directors surveyed expect price increases of five to ten percent. A quarter believe that prices will rise by up to five percent. According to 16 percent, prices will increase by more than ten percent. Only three directors out of one hundred expect a decrease in the prices of construction materials next year.

According to the study, the increase in the prices of construction materials and labor is also reflected in the further increase in the prices of apartments and other real estate. If prices continue to rise, it could manifest in restricted demand. "Demand is primarily influenced by housing prices. Less significant is also the expectation of further economic development and the migration of residents for work. Low interest rates on mortgage loans have less significance in decision-making," added the director of the development company Trigema, Marcel Soural.

According to the study, construction companies currently have contracts for 9.5 months ahead. For large companies with a minimum annual turnover of 200 million crowns, this is 10.8 months. For half of the companies, this means a year-on-year improvement, while four directors out of one hundred speak of a decline.

Next year, two-thirds of construction companies would like to increase their workforce, on average by 12 percent. However, they are concerned that they will not be able to find the required number of employees. "Planning is one thing, living in reality is another. The consequences of the current and previous governments' incapacity in education and in the politics of accepting foreigners, combined with the economic boom in Europe, will be difficult for construction companies to overcome," stated the director of INOS Zličín, Radoslav Dvořák.

In terms of trades, construction companies are most in need of bricklayers (76 percent) and carpenters (60 percent). It is also a challenge to find plumbers, roofers, electricians, machinists, or tilers.