Rising input costs impact Punjab prices, India

Rising input costs impact Punjab prices, India
Published: 01 September 2011

Construction projects across Punjab are getting delayed or cancelled due to steep and steady rise in prices of input material like cement and shortage of skilled manpower, industry body Assocham said. 

The Assocham interacted with around 150 people from the industry across Punjab including builders, contractors, developers, building material manufacturers, traders and real estate consultants to ascertain the impact of soaring construction prices and labour deficit on state’s real estate and construction sector. 

About half of the respondents said that upward spiraling costs of significant construction materials has been putting a great pressure on project execution as they find it difficult to keep their margins intact. 

Steel, cement and labour are the key components and they alone make for almost 75 per cent of overall construction cost. 

All the raw materials have been hit by rising prices, besides, sharp rise in lending rates by banks has hit the realty sector severely, said majority of the construction material manufacturers and traders adding that instead of passing on the raise in raw material cost to end consumer they are cutting down the production.

"Construction material manufacturers and traders are not only coping with eroding profit margins but reportedly their stocks have also lost the market capitalisation by 15 to 20 per cent over the period of last four to five months," the survey said.