Hyperinflation in the price of construction materials
At the end of 2021, construction costs in residential buildings increased by 23.5%, according to the Direct Construction Cost Index prepared by ACR.
In addition to this, in the few months of the year 2022, there have been events that put even more stress on direct costs in the construction sector.
The conflict between Russia and Ukraine prevents the import of materials that are highly demanded by the sector (according to the Ministry of Industry, Trade and Tourism, Spain had imported 28.5 tons of aluminum from Russia and 85% of the imported clay comes from Ukraine, according to ICEX). Transport strikes and work stoppages have caused a breakdown in the distribution chain, delaying the delivery of many materials used in construction. Lastly, the rise in prices in the energy sector also influences the production cost of some materials, which are subsequently translated into a higher cost of these.
With this panorama, there are many construction entrepreneurs who find themselves before contracts for the execution of works signed prior to the occurrence of these circumstances, in which a fixed price is established, and which have become impossible to fulfill without incurring losses.