Inflation is worrying as a rise in prices can affect everyone. It is not just for consumer goods, but every sector is seeing price increases. It is a vicious cycle where inflation leads to price rises in every sector and this goes on. In the world of construction, building material costs have gone up significantly. This is a worrying trend for everyone concerned.

Price rise of building materials


When we look at the period from January 2021 to January 2022, we find an increase in building materials price by 20%. This is a one-fifth increase in prices, which is quite high. The data is from an analysis done by a contractors’ association. When we take a closer look at the price rise data, we find that steel is the main culprit behind the huge price rise.

The price of steel has increased by a whopping 112.7%. This huge price increase is a key factor in the overall construction material price increase. This doesn’t mean that only steel prices have gone up. Plastic prices have increased by 35%. The price of lumber and plywood is up by 21.1%. These price increases have all contributed to the overall increase in building material prices.

The challenges ahead


There is no indicator that prices are going to come down immediately. All parties need to be prepared to continue with the same situation or even expect worse. The situation will affect everyone concerned:

  • Builders and contractors will need to spend more to buy materials. They will start by choosing and looking for the lowest price.
  • Suppliers of construction materials will face pressure as there may be lesser sales. Some people may even consider postponing construction until prices are favorable.
  • The end customers or the building owners will be the most hit. They have to spend more on constructing or buying a house.
  • Both contractors and suppliers of materials will be left with a lesser profit. They will not be able to increase prices since buyers may then respond by reducing the number of purchases. The reduced profits will affect their business and may even lead to losses. This is a serious concern that can affect the entire industry.

Managing price rise


It is not possible to construct a building without materials. Hence, there is no option but to spend more to buy all that is needed. There are ways in which the situation can be managed. When you are buying materials for construction, you need to find a reliable building material supplier who offers credit with favorable terms. This is the need of the hour.

Also, negotiating with suppliers can help in getting some price reductions. It may be also required for future building plans. This can help in reducing the use of materials, thereby saving money. It is important though not to look for cheap materials and buy from dubious sources. This can cause serious problems later if the construction work is not up to quality. Buyers need to hope that things will change in the months to come. Even a slight fall in prices can help stabilize things.