The end of the rising prices of building materials is not yet in sight. Producers fear that the energy crisis will be the next blow to the construction industry, putting contractors in trouble and consumers being unable to afford it.
That is what Niels Ruijter of the Dutch Association of Supplying Building Materials Industry (NVTB) says. “The high prices for gas, among other things, also have an effect on production processes. It does not affect the deliveries so much, but the pricing. It is obvious that contractors will run into problems if they have accepted a project for a certain sum, and will not be able to manage with the purchase of their materials.”
The most recent import price figures from Statistics Netherlands still show unprecedented increases. Sawn and planed wood was 64 percent more expensive in August than a year earlier, veneer panels 31 percent. Rolled steel products are even 75 percent more expensive. Aluminum 32 percent, metal structures 44 percent. Cement alone is not much more expensive than last year (plus 6.3 percent), but cement, concrete, glass and bricks are exactly the kinds of materials that are becoming more expensive thanks to higher energy prices because a lot of heat is needed during production.
“Unfortunately, the end of the price increases is not yet in sight,” says Madeline Buijs, economist at ABN Amro. “As a result, products become more expensive for builders and consumers.”
It is logical that the consumer also gets these higher prices on his plate. We find that annoying, but we are not a charity foundation
Consumers notice higher building material prices
That the prices are passed on is apparent from figures from Koninklijke Hibin, the trade association of wholesalers in building materials. Hibin expects to close 2021 with a turnover increase of 14.6 percent. In 2022, turnover growth will probably fall to 8.2 percent, the association expects. “It is logical that consumers also get these higher prices on their plate,” said Niels Wensing on behalf of the Bouwend Nederland trade association. “We find that annoying, but we are not a charitable foundation. The margins in construction are not that high. Our concern is that at some point builders will no longer be able to pay for their projects in advance, because they have too little money in cash.”
Just because prices for building materials are rising in double digits does not mean that prices for homeowners are rising at the same rate. “When buying a house, the price for the consumer consists of much more than the prices of materials,” says Ruijter. “The land price, development costs and personnel costs form the main part. Yet there is an acute problem now that energy prices have soared. Producers cannot simply scale down and scale up again with their production, these are processes that take weeks or preferably even months. I’m talking about ovens, for example, that have to be phased in.”
The fact that contractors are still so busy with renovations, renovations and house building also has to do with the low interest rates in combination with filled piggy banks, according to Madeline Buijs. “Many people have had money left over from last year’s lockdowns. In addition, homeowners can use the equity to finance renovations. We have therefore not yet received any signals that construction will come to a standstill in places due to the high prices.”
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