Building materials are already 16% more expensive this year: half of contractors provide revision clause or daily prices in construction contract | Inland

Things are going from bad to worse with the prices and delivery times of building materials. Especially the prices of steel, non-ferrous metals, wood, PVC and insulation materials have increased even further since the outbreak of the war in Ukraine. With more than four in ten (44%) building materials dealers, quotations are only valid for a few days due to the rapidly evolving prices, for 8% that is even only a few hours. “Today’s price for a quantity of wood for the roof truss, for example, could be completely different tomorrow,” says Sven Nouten of the Construction Confederation. In addition, more than eight in ten (82%) contractors already say they are dealing with even longer delivery times than in January. “That not only makes the work for contractors more difficult, it also makes it difficult to make clear and transparent price and other agreements with the client-builder.”

However, more than half (51%) of the contractors do not yet pass on the price increases of materials, wages and energy to private builders, according to the survey of some 300 construction companies at the beginning of this month. “Perhaps not to deter the customer, or because the possibility of price adjustments was simply not included in previously drawn up contracts,” says Nouten. “While this is advisable, one in two construction firms is not, or not yet, working with a material price review clause. Or with a daily price, as is also the case in some restaurants for sole fillet, for example. Such firms are currently still carrying the losses themselves, while many indicate that they cannot sustain this for much longer.”

Moreover, there is little optimism in the sector about the near future. “The vast majority of construction companies fear that they will soon have to shut down certain sites or parts of them due to a lack of materials and/or excessive losses due to the high additional costs,” says Niko Demeester, CEO of the Construction Confederation.

In order to keep its head above water, the construction industry expects a number of supporting measures from the government. Demeester: “For example, temporary force majeure should be applied when work is not possible due to supply problems. Excise duties on business energy consumption should also be reduced and detailed price revision formulas should be included in contracts.”