Construction industry executives around the world have warned that “dangerous” price increases and a shortage of many building materials threatened to undermine the construction industry. Over the past few months, the prices of building materials in the EU, from wood, concrete and all metals, have started to rise sharply as the economic recovery in both Europe and elsewhere, including the US and China, has triggered a construction boom.
In Europe specifically, the cost of raw materials on the market, mainly construction timber (both solid and glued), has increased by an average of 140% compared to the 2020 trade negotiations. Timber prices have been rising for months, prompting builders to raise their prices and, in some cases, stop taking new orders due to the difficulty of accurately pricing during the course of construction.
“We are facing a shortage of many basic building materials and this is very dangerous as Italy has been hit harder than the rest of Europe”, said Flavio Monosilio, research director of Ance, the association of Italian construction companies. “This crisis is in the middle of the new EU recovery plan”.
Construction executives blame several factors for bottlenecks, including the sharp rebound in demand that outstripped supply of materials in many countries, as well as disruption of supply chains linked to the pandemic and continuing trade tensions.
Timber producers and traders expect prices to remain relatively high due to the strong housing market, but that the supply bottlenecks and frenzied buying that have characterized the reopening of the economy and have driven prices to multiples of old historical highs are gradually running out.