The main reasons for these developments are rising construction costs, disruptions in the supply chain of construction materials, discussions between construction companies and clients, and a shortage of suitable personnel.
Construction costs have risen sharply due to the war in Ukraine, as have fuel and energy prices. Although there appears to be some normalization at the beginning of 2023, construction materials prices will probably never again reach pre-COVID-19 levels. Disruptions in the construction materials supply chain have been caused by lockdowns and the war in Ukraine, which has brought products such as steel, aluminum and lumber to a standstill in large quantities. This leads to delays and congestion in the construction process.
Discussions between construction companies and clients have become more intense because of delays, personnel shortages and sharp price fluctuations.
Covering price risks with upfront fixed prices and price indexations is no longer effective due to suppliers not meeting their commitments and explosive price increases of materials such as wood, steel and cement.
Despite these challenges, a positive picture is expected in the longer term for all construction subsectors. The task of sustainability and energy transition are causing building modifications and renovation work. In addition, the European Union aims for climate neutrality by 2050, which will benefit the construction industry. In the Netherlands, there is also an ambitious goal to build 100,000 new homes annually starting in 2024.