The prices for building materials have been subject to strong fluctuations in recent years. After dizzying increases, property prices rose by 25% % to 30 %, it recorded a sharp decline to the great satisfaction of consumers.
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The effects of the pandemic
While several companies, especially in the service sector, were forced to temporarily suspend their activities, many workers were forced to stay at home and benefited from financial support from the state. This meant they had time and liquidity. In this context, many have started renovation work.
The impact of this sudden surge in material demand has led to a decline in inventories while putting great pressure on supply chains that were operating slowly amid restrictions in producing countries, including China and the United States. -United States. Results: Shortages in several sectors and price increases.
Other factors to consider
We use lumber to build, of course, but also many products made from metals from international markets, including reinforcing steel, aluminum, copper, nickel and tin.
The price and availability of these metals are subject to upheavals occurring internationally. “When Russia declared war on Ukraine,” explains Jean-Philippe Cliche, senior economist at the ACQ (Quebec Construction Association), “the price of steel rose by 75% in two days. The price of all natural resources has increased and we are seeing it gradually decrease. »
Reaction of entrepreneurs
As prices skyrocketed, contractors who had contracts with customers found themselves in an unfortunate position. In order not to build at a loss, they had to negotiate adjustments with customers, some of whom were not very receptive to their wishes. To protect themselves from all these price fluctuations, contractors are increasingly including a price adjustment clause in their bid.
For the foreseeable future
“Prices are back to roughly the same level as before the pandemic,” says Marc Santerre, Senior Materials Advisor at RONA Knowlton. We are currently in a situation where suppliers are having difficulty sourcing. In addition, as everywhere in the construction industry, there is a shortage of workers, waiting times are much longer, both for receiving the service and for receiving the products and materials. »
Diploma
Until now, the concept of market globalization has been rather theoretical and intangible. But now it turns out to be very real and is hitting us hard.
“It is clear that we will be living in a period where price fluctuations will be more frequent,” says the ACQ’s Mr Cliche, “where market volatility is high.” There is currently great uncertainty and high global tensions. If Russia attacks other countries, if China invades Taiwan, that would trigger a war in Asia, then Japan would be involved… All of this could lead to a lot of speculation in the markets and prices could fluctuate wildly. »
So far, the forecasts for the coming year point to a stabilization if nothing clouds the situation. Let’s use it! If you have work projects in mind, don’t hesitate. Trade while the wind is favorable!
Advice