As per reports, the Gulf construction sector may witness a drop during 2008, due to surging costs of construction materials and a weakening world economy.
The prices of building materials are set to increase by nearly 5 percent towards third quarter of 2008, driven by record oil prices, soaring demand and rising freight overheads.
Speaking to Gulf News, Danube Building Materials said that the ever-increasing growth in prices will have a major financial impact on the local construction industry. The real estate and construction industry will begin to feel the pinch of rocketing oil prices and mounting freight costs during the coming months, taking into account massive projects that are being launched.
During initial part of this year, the prices of building materials increased between 10 to 15 percent, driven by local fuel hike, high freight costs, restrictions on log cutting by countries like Indonesia, Malaysia, and Burma, and depreciation of US dollar and high local demand.
For instance, steel was one of the construction products that saw maximum increase in price from $700 per ton in January to 1500 per ton in July.
Even prices of wood products such as timber and film-faced plywood also increased by 25 percent during the last three months, with the latter costing approximately Dh.130 per piece, and increase from Dh.105 charged during couple of months ago.
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