Health crisis, increase in the price of sea freight, Donald Trump’s policy … The causes are multiple.
If you were planning on having your house built in the coming months, the situation is not ideal. For several weeks now, certain materials have become scarce, which has led to an increase in their price, such as steel, the cost of which has increased by + 30% over the past six months. A worrying finding for the various players in the building sector.
“It is a time of very strong anxiety. It is not easy for business leaders, who risk seeing certain sites stop for lack of materials. It would be a shame since all the sites are open and working 100%»Declares Olivier Salleron, president of the French Building Federation (FFB).
The prices of certain materials are soaring, such as copper or steel, but it is in particular the soaring price of structural timber that seems to worry Oliver Salleron. “On timber for house construction, we are at a 200-250% increase. It’s a spike in prices and soon a shortage“.
Disorganized supply chains
Several factors seem to be at the origin of this price increase. The health crisis has disrupted the various supply chains. The sudden resumption of site activity at the start of the year forced companies to source material from where production had resumed, thus leading to higher prices. Another factor, the policy of Donald Trump. The former president had heavily taxed Canadian lumber, which is now pushing American companies to turn to European lumber, buying it at a much higher price. Added to this is the rush to stock materials, however limited, from the United States but also from China, due to their strong economic growth at the end of 2020.
This situation is also explained by the increase in the price of sea freight, ie freight transport costs, up to + 400% for containers. This explosive increase in costs is linked to the traffic jam at the Suez Canal, caused by the grounding of the container ship Ever Given.
The shortage and the accompanying rise in prices are already being felt by some companies, as Denys Frémont, who heads ID Construction, a general building company in the Val d’Oise, confides. “It is a disaster on many subjects. All scrap for reinforced concrete took + 30% increase. We are not out of stock but we are delivered in a dropper“.
Another major concern, the problems related to the slowness of the deadlines. “Previously for plasterboard, we were delivered in 3-5 days, now we have to wait 15 days or even 3 weeks. For another big job, I ordered wood wool from a manufacturer. He told us that it would take 4 months, compared to 4 to 8 weeks usually, which was not possible with the progress of the site. So I went to another supplier who had some in stock, but I had to pay 20% more.“. If the situation persists, companies therefore risk suffering a double penalty: both an increase in the cost of materials, but also the risk of incurring a late penalty from customers.
No return to normal for 6 months
To remedy these problems, the FFB wrote to the Minister of the Economy, Bruno Le Maire, and asked him “to update the prices upwards or downwards according to the fluctuation of the prices of materials in the coming months“. Also, and above all, of “freeze penalties in the event of a proven shortage of materials”, To prevent companies from being penalized by sanctions from their customers.
What is certain is that we will have to be patient before a return to normal, which will not happen for several months as Olivier Salleron explains. “We hope that it will stabilize again in 6 months, while the production lines are back to 100%. Solutions will have to be found at the level of the French government but especially at the European level“.