German construction industry faces price hikes for building materials

2021-04-22 11:35:18 GMT2021-04-22 19:35:18(Beijing Time) Xinhua English

BERLIN, April 22 (Xinhua) -- Since the beginning of this year, significant price increases were recorded for construction materials in Germany, the main association of the German construction industry announced on Thursday.

Steel products and bitumen, which is used in road construction and for sealing work, were particularly affected by sharp price rises, according to the association's statement.

The reason for the significant increase in steel prices in particular was "apparently limited supply capacities at manufacturers due to the recovery in demand in the automotive and engineering sectors," the association noted.

The swift recovery of Asia's economy also led to rising raw material prices. According to the association, producer price of copper wire, for example, went up by 18.6 percent within a year.

At the same time, overcapacities were reduced and capital spending scaled back during years of stagnating prices. In addition, there was "growing investor interest in commodities, particularly oil and industrial metals, which serve as a hedge against inflation."

The association of the German construction industry is expecting prices for services in the main construction sector to rise by 2 percent in 2021.

"However, if construction material prices continue to rise, this price increase will not be sufficient to cushion the increased costs," said Rene Hagemann-Miksits, deputy managing director of the association, in the statement. Enditem

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