Effect of steel prices and shortage on construction sector

Effect of steel prices and shortage on construction sector

Unforeseen steel prices and shortage are putting pressure on construction sector. This situation is prevailing in almost every country. The construction costs are expected to increase by 35% in Saudi Arabia due to a rise in iron and steel prices. Therefore, contractors have been forced to mount up their charges as a result of price hikes in building materials like steel, cement and wood. Furthermore, there are many contractors who suffered from this condition went bankrupt. The cost of steel which have been doubled since last summer is compelling US developers to reconsider about their construction projects. The high prices have started to affect projects as they were signed previously. Moreover, if the increases keep going, some construction projects may be called off. The price increases are most widely attributed to the revival in China's construction sector which also causes raw material shortages. In Malaysia, the existing issue is in relation with the inadequate supply of steel bars for construction sector. The building contractors stated that the current shortage of steel for the construction sector depends on the government's ultimate decision on the price determination for the commodity. The inadequate supply of steel bars in Malaysia also grows out from unabated ascent in the price of steel scraps. These conditions are also forcing contractors to pass onto increases their customers.