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The domino effect of price rise on the construction industry
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
To read more, CLICK HERE
- price surge
- construction raw materials
- fuel and transportation costs
- supply chain costs
- fixed-price contracts
- increase in raw material prices
- per cent rise in steel
- impact on the construction industry
- Steel price up by
- Rise in material prices
- Shriyal Sethumadhvan
- Vinit Dungarwal
- Director
- AMs Project Consultants
- RERA
- prices stabilise
- Dhaval Ajmera
- Director
- Ajmera Realty and Infra
- higher inflation
- Domestic fuel prices
- Naveen Mypala
- Founder and Managing Director
- Urban Living Systems
- Rapidly increasing oil prices
- profit margins of housing developers
- launch budget homes
- affordable housing developers
- Rohit Poddar
- Managing Director
- Poddar Housing & Development
- recover costs
- steel and cement prices have increased by almost 120 per cent
- V Gopal
- Executive Director - Projects & Planning
- Prestige Group
- reduced GST tax slab
- Aditya Khushwaha
- CEO & Director
- Axis ECorp
- Rajendra Joshi
- CEO
- Residential
- Brigade Enterprises
- Barun Pal Chowdhury
- COO
- Ashoka Buildcon
- fixed-price contracts
- RCC stage
- shell-and-core construction
- price escalation for tenders
- government intervention
- SL Chanchlani
- Executive Vice President and Chief Commercial Officer
- ITD Cementation India
- Ajay Hans
- Managing Director and CEO
- Welspun Enterprises
- balance sheet margins
- effect of price rise on the construction industry
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 SethumadhvanTo read more, CLICK HERE