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Sunday , January 29 2023

Markaz blames ‘increase in cost’ of construction material in Kuwait to high cost of basic materials

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KUWAIT CITY, Oct 24: The Kuwait Financial Center (Markaz) said that the increase in the cost of construction in Kuwait is due to the high prices of basic materials, logistical costs and lack of supply chains, reports Al-Qabas daily.

Markaz added, in a report entitled “Construction Cost in Kuwait and its Components”: The main factors in this change are the rise in the prices of basic materials and the rise in inflation rates worldwide. The report explained that the significant increase in the prices of primary raw materials, such as structural steel supports, rebar, timber, copper tubes and cables, in addition to the shortage of labor at the level of the construction sector in the region, are the main reasons for the increase in construction costs in recent years.

To find out the effects of increasing infl ation rates globally, the report delved into the study of rising prices of imported goods and their impact on development in the Gulf region, where geopolitical tensions and disruptions in global supply chains have increased the cost of construction in the GCC countries.

Forty percent of the respondents to a Turner & Townsend survey focused that increases in construction costs significantly affect the delivery of completed development projects, while 60% indicated that a shortage of skilled labor directly affects the delivery of construction projects.

In light of the transformations that the world is going through, the report indicated that the construction industry in Kuwait is currently witnessing an increase in the cost of construction as a result of rising labor costs, and increasing prices of materials and transportation services. Last February, the average cost of building one square meter of private housing was estimated at 230 dinars, compared to about 170 dinars per square meter before the start of the Corona virus pandemic, an increase of nearly 35% due to materials and labor costs.

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