Construction Material Prices Reach New Heights

With organizations and individuals alike questioning the ever-rising cost of construction materials, our team thought we would take this opportunity to delve deeper into examining what exactly the causes behind these price hikes are and, more importantly, what the macro-economic driving factors at play are.

Firstly, with interest rates held at record lows over the past two years, the domestic inflation-rate has continued to surreptitiously increase. This continued rise in inflation has meant that construction costs have experienced the highest annual growth recorded in 16-years – increasing by 7.3% year-on-year alone, according to the Cordell Construction Cost Index.

Couple supply chain constraints being felt the world-over with Australia’s growing inflation rate, and the upward pressure placed on invaluable construction materials commences to be seen. The combination of border security concerns in relation to containing another domestic COVID-19 outbreak, as well as the more recent developments involving Eastern Europe and Russia are causing logistical chaos for sourcing and transporting commercial products such as steel.