Following Cement, Price of Bricks to Jump Too – Investment in Local Production of Building Materials Necessary

The prices of building materials started increasing dramatically this year, and, as things stand, they are to continue rising.

– Concrete iron was the first, whose price jumped by up to 40%, then the price of aluminum jumped by 70%, and the price of sawn wood, firwood, increased the most, by as much as 200% – Goran Rodic, the vice-president of the Chamber of Construction Industry of Serbia, says for eKapija and adds that the reasons for that are the increase in the price of energy sources and transportation problems.

Rodic says that the electricity price increase in the world market by around 40% is one of the main reasons for the dramatic jump of the prices of construction materials.

– The amount of electricity, but also gas, required for the production of sawn wood, aluminum and iron is great. We still have cheap gas, but a price increase is expected there as well, in line with which the price of cement is jumping by 25%, and the brick products, which, so far, have seen their prices increase the least, some 2-3%, are now expected to be 20-25% more expensive, because they use electricity and gas for the production of clinker, which is the basis for cement – our interviewee says.

The problem, he points out, is that Serbia no longer has the local production of building materials.

– There’s nothing basically domestic as far as building materials go. We have big foreign investors which get subsidies for the opening of factories, but they are foreigners, the cement factories are foreign companies, the brick factories are mostly the same, as are the producers of aluminum and iron. Furthermore, we are import-dependent, and huge amounts of finished products, such as cement, bricks and shingles, are exported – Rodic says and points out that the country should upgrade the local production of iron, aluminum and chemical building products.

He adds that the transport prices has also increased due to Covid, and the inflation is expected to greatly increase.

– A month ago, RSD 6,000 could buy you 42 liters of diesel fuel, now it only gets you 35. State charges are big and it’s high time for this to be considered – Rodic says and adds that the price of asphalt, rebars and cement will jump as well due to all this.

– On top of that, we destroyed our construction sector a long time ago, so how are we to build and maintain roads, bridges, tunnels…? The problem will only increase, as this requires tens of thousands of new employees, and we lack craftsmen, a manual worker wants a daily wage of EUR 40, our experts are old, we are pulling designers and machine operators out of retirement to work – our interviewee warns.

He reminds that, in the past, during crisis periods, our construction companies worked abroad, earned cash there and then invested here:

– Those were so-called cyclical events, which is what they were known as here and in China, for a period of 25-50 years, but we had a strong construction sector at the time, we were earning a lot abroad, and, at the time, payments made by workers and that foreign exchange inflow were sufficient to live on.

According to him, what needs to be recovered now are the few local construction companies that are left over and they should be the main contractors on the projects, which are still numerous in the country.

– We’re talking billions that need to be invested in energy, infrastructure… This way, we would put local resources to work, the wages would increase and the craftsmen and experts would stay here, and the problem with the prices of building materials would be overcome as well – Rodic says and proposes to the state to gather experts to solve the problems in the construction sector.

B. Petrovic

Građevinska industrijska komora Srbije

Chamber of Construction Industry of Serbia

Goran Rodić

building materials

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