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Soaring prices of building materials are adding to inflation in the country, leading to an increase in property prices - and forcing investors to count extra money. Building materials, including cement, rebars, and aluminum along with labour costs represent the major cost factor in the construction industry. Price stability, therefore, is important to retain investor confidence in the sector.
Prices of construction materials are continuously rising, led by steel, which nearly doubled during the past eight months. This means contractors are having to rethink their strategy and hedge materials to reduce risks. Although this is primarily due to rising demand and factors linked to the global production and supply chain, the construction community and the government collectively need to develop a strategy for materials safety plan, including storing and hedging.
The UAE Contractors' Association could come up with a solution to the problem by engaging with the industry leaders, before the situation worsens to the magnitude of a crisis.
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