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Published on 2/5/2021

Published by marketing@concretebroker.com.au

Concrete prices set to rise in 2021

Concrete Broker analyses the cost of your upcoming concreting project in 2021


 

 

In 2020 COVID 19 had a significant impact on the construction industry in Australia.

The Master Builders Australia said in late 2020 there had been at least 82,000 job losses in the construction and building industry from 14 March 2020 to August 2020. This 6 per cent decline occurred despite JobKeeper support payments going to nearly 350,000 workers (as well as grants for small to medium-sized businesses). 

 

 

Yet as we gradually move into a 2021 where COVID 19 lockdowns dissipate, the price of fuel, copper, aluminium and steel are all steadily rising. This is leading to a steady increase in the cost of building materials. Similar to the US, where the cost of lumber has risen rapidly in recent years due to significant shortages, Australia is facing its own supply and demand issues. As China’s economy continues to strengthen so does their demand for our natural resources, in particular steel. Whilst government support for the building industry through first home owner incentives and stamp duty concessions is placing upward pressure on our building material prices.

 

So what does this mean for the concreting industry in Australia, and the cost of your concreting project in 2021?

Firstly it represents a rise in steel reinforcing prices. Locally steel companies have increased their prices to customers on February 1 by 7%. A further 13% rise is gazetted for March 1. Therefore expect to pay approximately 20% more or thereabouts over winter for your sheets of SL 72 and 82 in addition to your N12 bar. The cost of delivery and the price of accessories may not reflect this increase in the price of steel reinforcing, but either way your concrete slab is going to increase in cost substantially in 2021.

 

Concrete prices remained steady in 2020. Leading concrete suppliers including Hanson, Boral and Holcim all left the price per cubic metre of concrete unchanged. Given the decline in construction activity as a result of COVID 19 it would have been hard to increase concrete prices, even if they had sought to do so. The demand for concrete simply wasn’t there. Yet all the major concrete players in Australia are currently warming their customers up for rises in concrete prices from April1, 2021. Concrete Shopper consultant Tim Harrison notes “ the cubic metre cost looks like increasing anywhere from $10 per cubic metre, to $12 and $14 per cube, depending on who your supplier is. And unlike in 2020 the concrete supply companies are working hard to ensure these price increases stick," he said. If incepted in April this year, these price increases would represent a rise of approximately 5% in the cost of concrete, at a time when CPI increases are closer to 1%. 

 

Despite  material costs rising the jury is still out on whether labour costs shall follow suit. At present there is still pressure on local concreters in search of higher square metre rates. In Sydney concreters are keen to form, pour and place concrete for over $100 per square metre. Yet labourers and at times unskilled concreters are pushing the rate down by offering “day rates” for labour at a fraction of the square metre rate. With the job market still in a state of limbo, and homeowners reticent to part with their COVID cash for fear of another lockdown, labour costs are not anticipated to rise as quickly as building material costs are.

 

 

Concrete Shopper Pty Ltd consultant Tim Harrison forecasts rises in concrete prices in 2021

 

“I think the large reo and concrete suppliers are going to be able to make the increased prices stick in 2021," concludes Harrison. “In Sydney there is going to be increased supply pressures with Badgerys Creek and other large infrastructure projects coming online. Whilst with Melbourne continuing to move into a COVID free world, and the West experiencing a mini resources boom, I can’t see the major suppliers giving in to customer demands for price stability," he said. “So expect to pay a bit more for your concrete in 2021” he went on to say.

 

 

 

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Tags: building concrete prices concrete shopper construction reo


This article was written by marketing@concretebroker.com.au all rights reserved. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect those of concretebroker.com