Impact of price hike in construction material on local industry
There are six price influence factors of building materials, which are the value of building materials, supply-demand relationship, national macro policy, the value of money, notes circulation and the influence of the international market.
Inflation plays a vital role in the price increase of materials, labors, and machinery, which results in deviating the initial and the final cost of the project. Construction costs are volatile, and the prices of materials and other costs are continuously fluctuating, creating volatility in economic growth.
Increased global demand in the construction sector, combined with the multiple and complex impacts of the pandemic and logistic issues, have resulted in unprecedented shortages, delays and ultimately, increased prices of materials and labor across the economy.
There has been a global shortage of raw material shortages, stemming from global demand and other external factors (including the slowdown and in some instances, factory closures, outside the country), which continues to constrain the production of certain products, such as insulation, paints and adhesives, as well as packaging.
There are several ways to fix it such as:
- Dealing with a shortage is no small task.
- Expedite Parts.
- Improve Forecasting.
- Improve Lead Time Accuracy.
- Eliminate Single Point Failures.
- Develop a Shortage Attack Team (or better shortage management processes)
- Improve Supplier Collaboration.
- Ensure accurate inventory data.
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