Building material prices jump steeply

Prices for basic building materials jumped sharply in July according to latest figures released by the Statistics Centre in Abu Dhabi. The price for aggregates and sand climbed 17.7 percent, while the average price for cement rose by 8.8 percent boosted by a price increase of 15.8 percent by Al Etihad White Cement. The building materials report also found that prices of UPVC pipes and paints declined by 6.6 percent and 5.8 percent respectively from their June 2011 figures. Some developers said that this spiral has caused a severe crunch on the construction industry, and will add to inflationary pressures, create an economic slowdown and a subsequent investment collapse, while others believe that these sudden dramatic increases are triggered by the ongoing growth in the country. Demand accompanied by the monopoly in the supply of core construction materials, such as steel and cement, has generated the current soar in the prices of building materials. Other factors include the tendency of developers to buy quantities that exceed what is actually needed. Steep hikes in the cost of core building materials, is a scenario that has become the source of deep concern among developers who see that this continuing rise in prices will have huge financial implications on the already distressed construction industry.