Who determines the prices for building materials

Increases in the price of building materials put the brakes on construction projects

With the rise in material prices, builders and do-it-yourselfers are threatened with a price shock. The dynamic price increases are mainly due to the corona pandemic.

Increases in the price of building materials put the brakes on construction projects
Increases in the price of building materials put the brakes on construction projects

Since the fourth quarter of 2020, the prices of building materials such as wood, insulation and steel have been increasing, as announced by the Central Association of the German Construction Industry. He sees the main cause in the corona pandemic. Building a house in Corona times is therefore an additional challenge. The Association for Insulation Systems, Plaster and Mortar e.V. also sees another reason in the dependence on the international raw material markets.

Reasons for rising prices

The managing director of the Central Association of the German Construction Industry names the corona pandemic as the reason for the price development: "In connection with the global spread of the pandemic, production capacities were reduced in the first half of 2020 as a result of the collapse in demand." With the economy in China in the third quarter of 2020, the Demand increased faster than production capacity can be ramped up. "Starting up production capacities in the fourth quarter was also made more difficult by the onset of winter in the USA."
Added to this are unexpected shifts in international demand, accidents in factories and delivery bottlenecks due to breakdowns.

There may be delivery problems. But we suspect that some producers of raw materials and intermediate products are using the pandemic to improve their returns
Dietmar Ahle from the Federal Association of Color Design for Building Protection

Which building materials are becoming more expensive?

Compared to September 2020, the industry recorded price increases for wood of around 15 to 20 percent, according to the Federal Statistical Office. The prices for petroleum products rose by 15 percent and for reinforcing steel by almost 30 percent. The prices for insulation materials also rose by 50 percent in April.

The price increase also affects all other materials on the market, including products from the mortar and plaster sector, varnish, paint and even paint buckets.

How can price fluctuations be prevented?

Markets are unlikely to ease anytime soon. Builders must therefore expect that the total costs of their new building will be higher. Therefore, Pekleppa demands that more gravel, sand and gypsum have to be extracted in Germany. Dr. Riechers from the VDPM is in favor of a basic supply: "If entire industries can no longer produce due to extreme environmental standards in Europe, we become completely dependent."

What do builders and do-it-yourselfers have to prepare for?

If you are currently on a construction project, expect delivery bottlenecks and unexpected price increases. If building a house is still in the planning stage, it doesn't hurt to find out how to build a house cheaply.

According to Andreas May, builders from the Bauherren-Schutzbud e.V. (BSB) must be aware of delivery bottlenecks. As a rule, small businesses in particular cannot easily access stocks and would order as needed. “If a construction company offers a replacement product, builders should urgently check with an independent expert whether the use is suitable. In the event of unforeseen interactions, there is a risk of long-term consequences and damage that builders could pay dearly, ”said May.

Due to rising building prices, builders have to expect two to three percent additional costs. However, you need to be careful with existing contracts. The BSB trust lawyer Wendelin Monz points out that the prices are firmly agreed in a concluded contract. Therefore, you should consult a specialist lawyer for supplements from the company.

Since, in addition to the delivery difficulties, prices will not drop significantly in the near future and the craft businesses are also affected, it is worthwhile to postpone cost-intensive projects. Standstill on construction sites becomes an inevitable consequence.