Construction industry costs to rise 15%

By Dinali Goonewardene

President of the Chamber of Construction Deshabandu Surath Wickramasinghe voiced concern that costs for the industry would rise 10-15% with the fuel hike and rise in exchange rate. “The cost of transporting building material to the North and East will impact input costs,” he said, adding that staff costs too would rise.

In the case of on going construction such as building hotels contracts may provide for the price increase with provisions to account for the increase, Wickramasinghe said. The industry imports 80-90% of inputs from countries such as Korea and Europe and the exchange rate fluctuation will compound the problem caused by the interest rate hike. “This makes it difficult for the industry to sustain,” Wickramasinghe told the Daily FT newspaper. It will take about three months for stabilization to take place.

A dialogue with the government is necessary to stabilize the situation, Wickramasinghe said.