Demand pushes building material prices higher

A lack of supply and increasing demand is pushing up prices of building materials in the UAE, according to the latest statistics released by Abu Dhabi government. The numbers, released by the Statistics Centre Abu Dhabi (SCAD) yesterday, showed that the price of some building materials had surged in June compared to a month earlier. The price of power cables rose 44.1 per cent in June a year on, while the average rents of transport equipment used for construction surged 37 per cent year on. During the same month, prices of aggregates and sand shot up 29.9 per cent year on year and the prices of wires for apartments rose 26 per cent from June 2010. In all, SCAD reported rises in the average prices of 15 out of 21 building material groups during the second quarter of 2011 compared with the second quarter of 2010. "It seems the demand pressure is mounting. Domestic supply is unable to cope with the increasing demand. Part of this shortage could be imported," Mohammad Amerah, an Abu Dhabi-based economist told Gulf News. "Prices of imported building materials are going up, The devaluation of the US dollar is a major factor behind the price increases," he added. Amerah said contractors should think of forming a consortium to negotiate better prices for imported building materials and should try to import them from cheaper markets. The SCAD report presents an analysis of the price movements of various materials used in the construction industry in Abu Dhabi market in June and the second quarter of 2011. SCAD's monthly report of building material price surveys the cost of 21 groups of commodities and services that represent the key materials used in construction activity, including cement, sand, wood, steel, concrete and cement blocks. The largest drop in June was in the price of glass, which plummeted 23.2 per cent compared with May, followed by drop in prices of bathroom sets and stainless steel sinks, which declined 10 per cent each compared with prices a month earlier, SCAD figures showed. From / Gulf News