Jamaicans facing sharp rise in cost of construction materialFriday, May 28, 2021
BY KASEY WILLIAMS
MANDEVILLE, Manchester — Following months of suffering from what they claimed was a shortage of cement, hardware operators in Jamaica's south-central parishes are now dealing with an increase in the prices of lumber and steel.
The hardware operators say they have to be charging their customers more for lumber and steel as the prices they face from the distributors have increased significantly.
They pointed to the cost of a tonne of steel which they claim has moved from $95,000 in January to $139,000 at present.
One retailer told the Jamaica Observer that construction ply per sheet was $3,400 in January, but the lowest price you can get it for now is $5,700.
Basil Phillips, proprietor of Phil's Hardware on Newleigh Road in Mandeville said the price increases facing Jamaicans are as a result of ripple effects from the novel coronavirus pandemic and demand overseas.
Phillips noted that almost 95 per cent of the the lumber used in Jamaica is imported from the United States and since last year the prices have been going up on the international market.
“I suppose there [in the US] people cannot go out and cut lumber as they used to do and sawmills, based on the domestic market in the US, are using it mostly. So people like us are left begging to get some lumber and the prices go up. Every time you go for a quote the price has changed,” said Phillips.
He added that the situation has resulted in difficulty sourcing some supplies, like one-inch lumber, and it is difficult to control the price.
In recent weeks, the Observer reported on a shortage of cement, with stakeholders in the construction industry complaining that the island's major supplier, Caribbean Cement Company Limited (CCCL), was unable to meet the demand for the key construction material.
“You might get some cement one week and the next two to three weeks you are unable to get, because something is always wrong out at the plant. There is something wrong there why we are unable to get the cement as we want,” Phillips charged.
But Carib Cement has argued that it has significantly increased production and any shortage is due to the booming construction industry and logistics issues, which has led to an increase in the demand for cement.
Chad Bryan, communication and social impact coordinator at Carib Cement told the Observer that the company will work on meeting the demand.
“We have taken steps to improve the situation. Maybe in another week or so the situation will improve further. We will continue to supplement the sector, so that everybody can benefit,” said Bryan, as he noted that CCCL has managed to keep its prices stable.
But Phillips told the Observer that he has had to resort to limiting the number of bags of cement sold to each customer.
According to Phillips, the shortage is also affecting his outlets in St Catherine and the Corporate Area.
“I have three branches and they [CCCL] have reduced me. The only reason I am able [to have] cement here is because I do not sell all my cement at the same time, I accumulate what I get, so that I can sell a limited amount each day,” he said.
Steel prices in the US have been sky-rocketing with CNN Business last month reporting that the price has reached a record high.
In the meantime, the operator of a hardware store in Santa Cruz, who asked not to be named, said he is considering laying off staff because of the effects of the price increases in construction material and shortage in cement.
“My sales are down by almost 30 per cent,” said the hardware operator.
“The price increase in getting a ton of steel coupled with the shortage of cement and the hike in lumber prices, [and] the cement company is denying that there is shortage in cement. There are a lot of challenges as it relates to the hardware business right now, because everything in the hardware is going up. As it relates to steel in recent weeks, I think it has gone up about $19,000 a tonne,” added the hardware operator.
He argued that increased shipping costs are also impacting the price of construction material.
Delroy Slowley, proprietor of True Bargain Hardware in Santa Cruz and Member of Parliament for St Elizabeth North Eastern, said the stockpiling of supplies by companies in the US is affecting the prices of construction material locally.
“The genesis of it has to do with our strong reliance on imported [material] in the business. Ore is rising on the world market, lumber likewise, because there is a shortage… The supply chain has been affected and has created a serious challenge in terms of us filling the demand that is there,” said Slowley.
“There are a lot of companies in the US that are buying up raw materials in anticipation of higher demand, which is also affecting the price. There is hardly anything we can do at this point other than just brace ourselves,” added Slowley.