Steel prices hike building costs

Steel prices hike building costs

Price index up 5.6% in second quarter

Workers assemble steel rods at a construction site in Bangkok. (Photo: Panumas Sanguanwong)
Workers assemble steel rods at a construction site in Bangkok. (Photo: Panumas Sanguanwong)

Soaring steel prices continued to push up the price index of home construction costs in the second quarter with a year-on-year rise of 5.6%, the highest level in 40 quarters, according to the Real Estate Information Center (REIC).

Vichai Viratkapan, acting director-general of REIC, said the price index of home construction costs in the second quarter this year was 131.2, up 5.6% from the same period last year and 1.1% from the first quarter.

"The year-on-year increase of the index was driven by higher prices of all categories across the board, with structural engineering jobs the largest increase at 12.4%," he said.

The second largest rise was electrical and communication system jobs at 5.4%, followed by architectural jobs at 2.3% and sanitary system jobs at 1.4%.

In the design and system category, the cost of architectural jobs represented 63.7%, followed by the cost of structural engineering jobs at 29.7%, while the cost of electrical and communication system jobs was 3.7% and sanitary system jobs 2.9%.

In the construction materials category, an increase was seen in six groups with steel and steel products recording the largest increase at 27.5%, followed by sanitary ware (12.9%), wood and wooden products (8.1%), concrete (6.3%) and electricity and water supply equipment (4.9%).

Only tiles saw a drop in prices at 3.2% while steel and steel products also saw a quarter-on-quarter increase of 7% and others had a quarter-on-quarter rise of less than 0.5%.

"The rise in steel prices was driven by an increase in fuel prices which saw an consecutive increase since February," said Mr Vichai.

"Soaring prices of fuel had a strong impact directly on the manufacturing and transportation sectors."

In the labour wage category, prices in the second quarter remained unchanged compared with the same period last year.

The year-on-year increase of 5.6% in the price index of home construction costs in the second quarter was the highest since the second quarter of 2012 when the yearly rise was 12.9%.

The rise of the index began in the second quarter last year from an increase of 1.4% to 1.9% in the third and the fourth quarters, respectively, before jumping 5.3% in the first quarter and 5.6% in the second quarter.

REIC together with the Home Builder Association conducted the price index of home construction costs by setting 2010 as a base year.


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