Rising building and construction prices
Rising raw materials prices
Increases of almost 40% for steel, 51% for aluminum and even 80% for certain types of wood... In Belgium, four out of five companies are affected by the wood shortage. Two-thirds are experiencing delays of two weeks, and one-third at least one month.Rising prices and longer lead times. The construction sector is struggling to keep up with post-covid demand. Behind this mess lie the delays accumulated during the crisis by many of the world's factories.
In recent months, raw material prices have continued to climb, bringing with them a cascade of increases for all building materials. building materials. PVC, paint paints or polyurethane foam are now more expensive than ever, for example for insulation for example. "For some time now, even bricks and cement have been affected. In the end, almost all products are seeing medium to very substantial price rises", sums up André De Groote, President of FEMA, the French Federation of Building Materials Traders. This is also having an impact on construction work.
And at the end of the chain, finished products suffer. " If the price of aluminum goes up, so do your window frames. And as the price of wood rises , so does the price of pallets for transporting goods, and therefore of transport. Finally, I recently met a contractor who uses small steel nails to fix plasterboard. The boxes originally cost 300 euros, but recently he had to pay 500 euros", explains Véronique Vanderbruggen, spokesperson for the Confédération Construction. An example from the field that illustrates a very international problem, which originates in production plants here and there. In the wake of the arrival of the virus, many of these plants were shut down or rushed into action in anticipation of a drop in demand. Restarting these plants took time, and they are now struggling to catch up.
The virus also slowed down global shipping, with ships stuck in dock in every corner of the globe. Here again, the pump had to be primed, not to mention unexpected events such as the blockage of the busy Suez Canal last March. At the same time, demand exploded. All over the world, stimulus plans are mobilizing construction workers, as well as private individuals who - having tasted the joys of confinement - are investing in their homes in large numbers.
The example of wood
And then there are the specific problems that each material faces. Take wood, for example. The price of most types of wood rose sharply at the end of 2020. "This is essentially due to strong demand from the United States, where the construction sector increased production by 25% last autumn. And over there, people build a lot of wood. The other problem, again American, follows a decision by Donald Trump to tax Canadian wood. As a result, Americans have turned to the European market, accentuating the shortage here", laments François De Meersman, General Secretary of Confédération Bois.
For this material, prices remain high, but are still falling in July. "It seems that the situation has improved in the United States in recent weeks. We could therefore return to a more normal normal situation, both in terms of price and availability". What about the rest of the market? "For insulation, an 11% increase has already been announced for September. Steel prices also remain high, and even increase slightly until next year. So it varies product by product, and it's very uncertain", replies André De Groote (Source:Journal Le Soir : Cecile danjou 06 08 2021)
The situation in the wood sector is complicated. Raw material prices are skyrocketing and delivery times are getting longer. 80% of Belgian companies active in the wood sector are affected by a shortage. This situation is mainly due to one of Donald Trump's last decisions when he was still President of the United States.
Prices have doubled at a timber merchant in Namur
We visit a wood distributor in Namur. Fir, oak, OSB, wood wool or multiplex: prices are going up all the time. We come across a customer who is taking advantage of the vacations to embellish his terrace. " We know it's gone up. We know it's more and more complicated, and not all dimensions are available, but we adapt and make do with what's there", says Pierre-Antoine.
Donald Trump's decision + rising demand = shortage and high prices
One of the main explanations for this rise in prices can be found in the United States. A tax decided at the end of Donald Trump's mandate hit
Canadian lumber. As a result, Americans are sourcing from Europe, in the midst of a sanitary crisis where demand was picking up strongly. " Mainly Scandinavian countries. They paid very high prices, so the market became very high. What's more, demand also increased. All of this means that prices have doubled", explains Stéphane Scaillet, manager of the debois store we visited. Take the case of the disaster victims. They have to rebuild right away, so they don't have much choice but to pay today's prices.
This shortage comes at a very bad time for some individuals. The recent flooding have not helped matters. " I'm worried about the middle the middle class, who are going to find it hard to afford this kind of thing. Take the case of disaster victims. They have to rebuild absolutely now, and they don't have much choice but to pay today's prices. they don't have much choice but to pay today's prices, and today's prices is very high right now." says Stéphane Scaillet.
In Belgium, four out of five companies are affected by this material shortage. materials. Two-thirds are experiencing delays of two weeks, and one-third at least one month. of at least one month.
Source : RTL Mathieu Langer, Denis Caudronpublished on August 08, 2021 at 2:53 pm
Visit our service page to find out how Thomquin workshops can help you!