From Iceland — Price Increases Beginning To Disrupt Construction

Price Increases Beginning To Disrupt Construction

Published July 14, 2022

Photo by
Johannes Jansson/Wikimedia Commons

Sharp rises in commodity markets and pandemic-related supply chain disruptions have led to significant increases in building material prices, reports Fréttablaðið.

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Gylfi Gíslason, CEO of contractor company Jáverk, says contractors have never seen such increases in the industry. Deprivations abroad have had a huge impact on all projects.

Earlier in the year, contractors expected delays in almost all construction work due to the difficulty of procuring building materials, especially steel.

“It simply came to our notice then. We have steel that will last us at least this year,” Gylfi says. “Almost all of the comb steel that previously arrived in the country from Belarus now comes from countries such as Poland and Turkey, and it has been quite effective to create new sources instead of those that don’t work anymore.”

According to Gylfi, price increases, not delivery, are the greatest challenge for contractors at the moment.

“If we take as an example comb steel, which most people call cast-strength steel, it has risen by 260% in two years. Concrete has also risen and aluminum used in cladding has doubled in price over a two-year period. These are increases that are hardly unprecedented and it is quite clear that this will affect all our projects. ”

The only thing that offsets the recent increases, in Gylfi’s opinion, is that the price increases that have taken place on timber seem to be reversing to some extent. Nevertheless, increases inevitably affect contracts.

“We are bound by agreements in our projects, as is natural. Of course, the figures contained therein are not in line with these price increases. In other words, the price we get for certain projects is significantly lower than the price we have to pay for building materials. That is the situation we are facing today. “

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