In October, the national market for construction materials continued its 14-month correction process of the price dynamics. This time, the year-over-year rate decline was 1 percent, which is slightly more than in the previous three months. Meanwhile, on a month-by-month basis, the PSB Group announced no average change in quotations, thereby confirming the cosmetic nature of the markdown of monitored product groups.
The slight negative price dynamics of construction materials month-on-month continue to be published by the PSB Group. The same indicator in reference to the previous month, again, did not change. As experts from the RynekPierwotny.pl portal indicate, this situation is another fairly reliable confirmation of the established stabilization of average rate changes. In the latest report of the PSB Group, the decrease in prices in the wholesale channel was 0.7 percent and in retail 1.4 percent, i.e., in both cases without statistically significant changes in the latest monthly periods.
The October reading of the price dynamics of construction materials year-on-year indicates a still dominant position of cheaper commodity groups over more expensive ones – 13 to 7 in ratio.
Among the materials most discounted year-over-year, thermal insulations and finishes Lead with a drop of about 6 percent. On the other hand, at the top of the table, OSB boards and wood take the lead with nearly a 12 percent annual increase, then cement-lime increases by almost 5 percent while walls, chimneys, and carpentry increase by about 3 percent.
However, the turning point in the price correction of construction materials, which seemed increasingly likely due to the perspective of influx of funds to Poland from the Operational Program Infrastructure and Environment (KPO), does not materialize. Experts predict that such a scenario may persist next year.
As experts from the RynekPierwotny.pl portal suggest, the economic condition of the construction market, which is currently far from ideal, has a direct effect on the prices of construction materials. This is confirmed by the sinking statistics of construction and installation production or decisions on building permits issued in the first half of the year by the Chief Construction Supervision Office. As a result, the profitability and revenues of construction companies are drastically decreasing, and the ongoing markdown of construction companies on the Warsaw Stock Exchange has resulted in a nearly one-third decline in the WIG-Construction index in relation to the record values from May.
In this situation, the still visible revival in the Central Statistical Office (GUS) new housing investment statistics, which in October marked a significant upturn, is of little consolation. To break through the deepening construction industry’s regression, including the construction materials market, a radical increase in infrastructure investments financed from the Operational Program Infrastructure and Environment (KPO), is needed, which unfortunately does not seem likely in the near future. Therefore, the perspective of a statistically significant increase in demand for construction materials, and thus the definitive end of their price correction, seems more distant than it was possible to predict recently.
Author: Jarosław Jędrzyński, expert from the RynekPierwotny.pl portal.
Source: https://managerplus.pl/rynek-materialow-budowlanych-w-pazdzierniku-stabilizacja-cen-i-wyzwania-dla-branzy-w-obliczu-spadku-popytu-61219