As the pandemic has affected almost every aspect of life, the construction sector is no exception. The pandemic followed by lockdown and various restrictions gave a massive blow to the Construction industry resulting in a steep rise in prices. The price rise is estimated to be about 35% more than last year.
There are a lot of important factors which affects the prices of this industry; some of them are :
1. Fuel price
The fuel price hike is considered one of the critical factors that led to this inflation in the construction sector. Transportation of raw materials has been a very costly affair lately.
2. Labor Price
During the initial days of the lockdown, we all remember the mass movement of migrant laborers towards their homeland. This left the fast-growing cities with very few laborers to work with. And this labor shortage led to an increase in labor prices. Labor price has alone increased to almost 25%.
3. Raw Materials Price
In last one year, even the raw materials have seen a steep rise in their prices, for example –
- Steel price has gone up from a band of ₹55,000-₹60,000 per tonne to ₹64,000-₹73,000
- The cost of structural steel has increased from about ₹65,000-₹70,000 a tonne to ₹80,000-₹90,000.
- Cement price moved from about ₹350-₹400 per bag to ₹440-₹460.
- The cost of a lorry load of river sand has exceeded ₹1 lakh.
- The M Sand used for plastering has increased to ₹1,300-₹1,700 from about ₹1,200-₹1,300 a tonne.
- Plywood cost has gone up by 20 %.
And many more to the list. However, the prices of paints have been an exception in this case.
So we see how all these factors have affected the construction industry. Some of the adversely affected people in this business are –
The Contractors
The shortage of laborers and the inflation have slowed down the industry to the extent that it has choked down the contractors as no income is generated.
The Consumers
Many consumers who started building before the pandemic had no other choice but to continue with the project. They faced a delay in its completion and had to pay the additional interest due to the sudden rise of prices disrupting their budget and project cost estimation.
Are you also a part of the construction industry? Do let us know your experience or thoughts about it.
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