Builders are troubled not only by rising material prices, but also by their shortage

Prague - Rising prices of building materials are not the only problem that construction companies face. Due to the current situation with energy and the conflict in Ukraine, some commodities such as steel and wood are in short supply on the market. This arises from information from companies contacted by ČTK. According to today’s data from the Czech Statistical Office (ČSÚ), materials and products used in construction have increased in price by 25.2 percent year-on-year.

"In general, everything is getting more expensive," said Vojtěch Kostiha, spokesperson for the Metrostav Group. For example, polystyrene has increased in price by more than 200 percent since last January, and other materials are not exceptions to price increases of more than one hundred percent. "Reinforcing meshes are significantly affected by the current situation, and I estimate that their price will continue to rise, and availability will be low. The same applies to rolled sheets, rolled profiles, and pipes," Kostiha calculated.

Prices are affected by the lingering impacts of the COVID pandemic, which disrupted supply chains, as well as rising energy and fuel prices. Market uncertainty increases demand, stocks are being purchased, and merchants do not even offer some materials. "It's not just about the price of building materials, but also their availability," warned Ondřej Šuch, spokesperson for Skanska CS.

The shortage is exacerbated by the war in Ukraine, from which many materials are imported. There is a shortage of asphalt, wood, and the situation is critical for construction steel. "There is a huge shortage in the market, and in many places, it is completely missing. Without it, the foundations of a building cannot be constructed; if a company cannot obtain it, they cannot build," stated Evžen Korec, CEO and Chairman of the Board of Ekospol.

The specialist in metal materials, Ferrum, stated in April that the war in Ukraine has paralyzed the supply of certain grades of steel, including those resistant to corrosion and used in construction. "And the minimum amount of construction steel available on the market now is being sold at four times the price compared to last year," Kostiha noted.

"Masonry elements are increasing in price less. Autoclaved aerated concrete is made from natural materials and is produced in the Czech Republic, so the shortage of raw materials or dysfunctional shipping to Europe does not affect it as much. However, we too are primarily suffering from rising prices of raw materials, fuels, energy, and higher labor costs," said Peter Markovič, CEO of Xella for the Czech Republic and Slovakia, whose company manufactures Ytong.

Ongoing construction projects are unlikely to be jeopardized by current prices and the shortage of building materials. "Because companies have already secured materials for them," said Korec. The problem may lie with upcoming projects whose construction has not yet begun. "It can be anticipated that the start of some projects may be delayed due to missing materials," he estimated. "Complications are and will be not only in availability but also in the temporal linkages on construction sites," added Markovič.