Although concrete manufacturers are concerned about the collapse of the construction sector and the rise in cement prices, the situation is much easier now than during the previous economic downturn, but the shake-up comes in different ways in different areas.
Wind farms provide the volume
According to Kalle Suitslepp, manager of Betoonimeister AS and board member of the Estonian Concrete Association, a possible market downturn in the construction sector affects different areas differently. «Road construction companies, where the state has stopped investments, have it the hardest; their construction volumes fall the most. There is also a little uncertainty in residential construction. However, several long-planned new wind farm projects will certainly be put into operation in the near future. After all, the current situation on the electricity market eloquently shows that not enough investments have been made in the energy economy, and now more active action is expected».
The construction of new housing does not really stop, but the rise in bank interest rates and the increase in the price of construction can slow down the pace.
The rise in the price of materials started two years ago
«To get the best overview, one should study the construction price index, which is put together by the Statistical Office and which shows the increase in the price of three basic components – labor, construction machinery, and construction materials», – confirms Suitslepp.
According to his opinion, the increase in the price of construction materials seems exorbitant because it has taken place in a very short period of time.