Thursday, August 17, 2017

Construction material prices down in July

Most building materials are undergoing a seasonal reduction in price, even as labour costs are rising, industry professionals say.

Cement, sand, stone and roofing materials fell in price in early July, said dealers and builders, though iron prices were unchanged, and the price of bricks is up slightly. Both unskilled labourers and building craftsmen have seen wages increase.

U Soe Win, of Aung Myitta construction materials and Capital Construction, said demand for building materials had slumped by about 20 percent since the end of June.

“House building has declined in the rainy season, depressing demand and bringing down the price of materials such as cement, sand, stone, and roofing materials. But that’s normal,” he said. Slack demand in the rainy season usually pulls down prices, except in 2008, in the wake of Cyclone Nargis, when major reconstruction was required.

He said cement prices were down by K700 to K6000 for a 50-kilogram bag of Elephant brand, and Diamond and Crocodile brands were at K5600-K5700 a bag as of the beginning of July, down from K6200-K6300. Local brand Rhinoceros is about K5700. Sand was down from K5500 to K5000 for 100 cubic feet, and stone down from K6000 a cubic foot to K5200.

Iron prices were the exception, with prices unchanged in the past three weeks.

“Locally made iron is stable about K600,000-K650,000 for a tonne. Iron imported from Thailand and China costs K800,000-K850,000 a tonne. But most builders use local brands,” he said.

Cement prices fell as the volume available on the market rose after mid-June, said Ma Ei Thaw Dar, a spokesperson for Three Friends Construction Company.

“It’s also that wholesalers reduce the price as they worry about the humidity and don’t want to store it,” she said.

Corrugated iron roofing prices are cool, at about K600 for a square foot of 28-30 gauge thickness high-quality iron, and K400 for low-quality, according to Three Friends. Prices are about 18pc down on January.

Brick prices have increased compared to last year, said U Than Naing Win, the owner of Shwe Oat-aw brick wholesale shop in Htauk Kyant.

Now K65-K70 a brick, the price have been rising since May, when it was about K50-K55. This time last year the price was about K60.

“Brick prices are usually inverse to cement prices, according to supply and season,” he said.

Stainless steel prices are higher than last year because of strong demand, said a spokesperson for New Power steel trading. Steel prices are also affected by the US dollar exchange rate, and steel products from both China and Thailand are up in price.

U Sann Lin, sales manager of Soe Family tiles and construction materials, said tile sales had significantly fallen during the rainy season.

“Tile sales are down by nearly half, but with no price change. Local tiles are cheaper than imports but people like imported items because their designs are more attractive,” he said.

U Soe Win said daily wages for construction workers had increased by K500-K1000 during this rainy season.

“There are fewer workers available in the rainy season because that’s when they go back home and work on the farm,” he said.

U Aung Tun of MTP construction said building workers’ wages were up about 10pc year on year. He said he was paying K3000-K3200 for unskilled labour, while skilled labourers earned K5000-K6000 a day.

He said the price of nearly all construction materials except wood had fallen in July, just as it did last year.

“Wood is much sought-after by wealthy home builders. The rarer it is, the more expensive it becomes. But there is no significant increase in wood prices compared to last year. Teak costs more than K2 million a tonne and pyinkado K800,000,” he said.

But he predicted higher than normal demand because of rebuilding prompted by the demolition of unsafe buildings after the monsoon season.

U Myo Sa, the managing director of Myo painting group, also said labour charges were up, along with transportation and living costs. A big company would pay K2800-K3000 a day for an unskilled worker, up from K2400 last year, and K3500-K4000 for a skilled worker. Some small projects can pay more, as much as K4000-K6000.

“Big companies cannot pay as much as small projects, as we’ve got about 200 labourers and we give them jobs all year round,” said U Myo Sa.