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Materials and sand shortages challenge the future of construction

Date: March 28, 2024 Time: 17:53:00

During the last years there has been an increase of 33% in the material costs used for construction. In this context, the London Metal Exchange Index has denounced that the price of metals has become more expensive by 53% during the last financial year corresponding to the 2021-2022 academic year. But this is not the only material with skyrocketing prices over the last year, since according to Caixabank, materials such as cement, concrete and wood accumulate increases of 19.6%, 23.3% and 27.7%. respectively. Furthermore, all of these residential building materials have in common a component that seems vital to their capture: sand.

Sand is a fundamental element for the construction sector. To build a house, approximately 200 tons of sand are needed, while large buildings require more than 3,000 tons and highways are around 30,000. Experts expect this demand to skyrocket in the coming decades if we are to keep up with new construction. But the price of this material has not stopped increasing since 2019, the year in which a ton of sand cost 55 euros compared to 65 euros today.

Inflation, rising prices and the crisis in the real estate sector have accelerated the scarcity of this natural resource, as stated in the report “Sand and sustainability: 10 strategic recommendations to avoid a crisis” published by the Grid-Geneva team. of the United Nations Environment Program (UNEP). In which it is recognized that with the 50,000 million tons that we use a year, a wall 27 meters wide and 27 meters high could be built around the entire planet.

Through this study it has been recognized that the sand should be a strategic resource that goes beyond construction, since its environmental function is very important to maintain the environment, in addition, the need to improve and update the systems of dredging with which this resource is extracted from the sea depths. In this context, Pascual Peduzzi, responsible director of UNEP, stressed in his day that “to achieve sustainable development, we have to wonderfully change our way of producing, building and consuming products, infrastructures and services. We have to use them intelligently”. Highlighting that the fact of controlling the most extracted resource in the world could avoid a crisis by moving towards a “circular economy”.

The effects on construction

The Iberinform data collected within the BOE have revealed that in the Spanish sector a total of 4,175 construction companies have been dissolved, to which must be added another 1,224 that are in bankruptcy proceedings. These figures represent 26% of the dissolutions that have been carried out within the country and it is predicted that of these closures, at least 1,700 companies have done so due to the excessive price of raw materials.

The National Construction Confederation (CNC) has exposed that almost 40% of Spanish companies have had to cancel or paralyze their works due to the impact of raw materials. Specifically, they speak of 500 works that add up to joint losses of 230 million euros. The only government solution that has been proposed has been the Housing Rehabilitation and Urban Regeneration Plan, which has been budgeted with a total of 6,820 million euros thanks to European Next Generation funds.

Therefore, this situation raises a conflict in which we have two problems that are very difficult to address together. On the one hand, international environmental policies demand the extreme urgency of reducing the consumption of sand, since it is the second most exploited material in all industries after water; on the other, the construction sector contemplates a turbulent future in which the lack of resources to continue its activity is causing a very severe drop in its activity.

Aurora Torres, a postdoctoral researcher at Michigan State University who has carried out a study on the global sustainability of the sand exploitation system, has recognized that “the traceability of sand in supply chains within the construction sector is extremely weak. How can we have responsible consumption without tracking and differentiating between responsible and irresponsible litter sources?” If sand cannot be traced, “sustainable sand” cannot be certified.

This possession justifies that the construction sector is still highly dependent on this resource and that implementing restrictive policies could cause an excessive imbalance within the companies that would be directly affected by the regulatory measures for this material.

The future of the industry

The data offered by the latest Euroconstruct report show that, despite the European growth of 3.0% registered in the sector, it is expected that during 2023 the construction of new infrastructures will stagnate at 0.2%, adding to the crisis of the supplies that of the activity.

The general perspectives on European GDP for 2024 show a comeback of 1.9% compared to current figures. However, construction is one of the sectors that will not experience these booms, since the estimates point to the arrival of a two-year period that will paralyze the activities of the industry.

In national terms, Spain is one of the countries with one of the worst expectations, since Euroconstruct has revealed that there is less and less production rate, despite the fact that demand continues to be so high. For this reason, growth prospects have gone from 4% in 2022 to barely 1.8% in 2025.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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