The domino effect of price rise on the construction industry

30 Mar 2022 CW Team

While infrastructure has been taking centre-stage for India like never before, the price rise at an arbitrary rate is playing spoilsport, directly impacting project balance sheets.

The unique feature of rise in cost of input factors is the domino effect that it creates, says Ajay Hans, Managing Director and CEO, Welspun Enterprises. He adds, “Developers who have been dependent on subcontractors for direct execution of work face supplementary challenges owing to such unprecedented escalation in material cost.

Subcontractors under the pressure of increased cost may either resort to slowing down the pace of construction or compromise in the quality of delivery, leading to project delays. In fact, in some cases, subcontractors would need to be additionally compensated to continue onsite execution.”

The continuous increase in the price of construction material has eaten into the thin margins of realty projects as well. In this scenario, builders have no option but to increase the price of unsold inventory and recover costs from there...

- Shriyal Sethumadhvan

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