Construction materials’ prices up only 3.1% y/y in Romania in Q1

Building a house on a wooden structure from scratch costs today 8% less than last year, according to calculations made by representatives of an online platform specialised in construction materials quoted by Ziarul Financiar. It can safely be argued that this is a demand-side effect and only recently, possibly, an effect of the lower energy prices.

The chip (particle) boards’ prices plunged by 40%, the cost of iron (rebar) also decreased by 25%, and that of the metal roof tile by 20%, the representatives of the platform claim.

The statistics office INS data shows that the average price of construction materials increased by only 3.1% y/y in Q1. However, compared to March 2022, the prices were 4.4% lower in March 2023.

More detailed data show that construction materials prices soared by 73% within six quarters from the beginning of 2021 until July 2022. The average cost of buildings developed under contract with a construction firm increased by 37.5% over the same period of time.

Since July 2022, the price of construction has continued to grow despite the decline in the average price of construction materials, reflecting rather demand-side factors and only recently lower energy prices (or concerns about energy prices).

Data published by Bursa show that the prices of particle board indeed decreased by 26%-29% y/y as of May. The cost of wood elements decreased by 11%-13% y/y.

The rebar price decreased by 31%-33% as well. But the price of cement remained steady, and that of plaster increased by some 20% y/y. The cost of the bricks and autoclaved concrete blocks increased as well, although at lower rates (+3%-10%).

(Photo source: Ronstik | Dreamstime.com)