HYDERABAD: A steep rise in the prices of construction materials has resulted in cost uncertainty on a major scale in the construction industry. According to JLL’s report, the price of steel has increased by 45 per cent from Rs 45,000 per metric tonne (MT) in Q1 2020 to Rs 62,300 per MT in Q4 of 2021. Steel price has been increasing steeply post Covid-19 due to supply chain uncertainties, increasing raw material prices and high global & domestic demand.
The cement price has increased by 38 per cent since Q1 2020 which has resulted in the increase in the cost of other construction raw materials like concrete and cement blocks. In two years, cement prices have increased by Rs 2,000 per tonne i.e., from Rs 5,120 per MT to Rs 7,130 per MT.
Aluminium has seen a price increase of 58 per cent since Q1 2020. With global recovery and subsequent demand for aluminium, it is predicted to go even higher in the upcoming quarters as the supply may not be meeting the demand. If the cost of aluminum was Rs 1.13 lakh per MT in Q1 2020, it rose to Rs 2.03 lakh per MT in Q4 2021.
The report said that the cost of labour, too, has risen 10-15 per cent, besides the regular increase, due to the knock-on impact of Covid-19 protocols and its associated costs. This includes costs related to compliance to new protocols like RT-PCR tests, idle time until test results, increased accommodation space for the same amount of labour, quarantine facility and sanitation measures. Moreover, there is a shortage in labour supply, forcing the contractors to pay higher wages for the completion of work.