Use smart technology in construction - CIDB
Generally, all contractors were affected by the rise in building material prices, but the impact varied between small, medium and large-grade contractors.
SHAH ALAM - The Construction Industry Development Board Malaysia (CIDB) advises developers and contractors in the country to be more proactive in applying smart technology to address the issue of rising construction costs due to the increase in building material prices.
Its chief executive Datuk Mohd Zaid Zakaria said this was the best approach for those in the construction industry to reduce labour use and construction waste which were the two major factors determining the cost of a project.
At the same time, he also urged industry players to improve efficiency in the use of building materials and the project implementation timeline.
"Increasing construction costs is inevitable due to the rising demand for building materials and construction labour, which has led to higher prices for these inputs.
"The best way for construction industry stakeholders, such as developers and contractors, to address this issue is by enhancing efficiency in the use of resources and time and by employing smart technology to reduce labour and construction waste," he said.
He said this in response to the challenges faced in the construction of affordable housing for the B40 group, with prices now becoming increasingly challenging due to the rise in material costs such as cement and steel.
Zaid explained that the fluctuation in building material prices has affected the country since the second quarter of 2020 and continued to persist.
He added that generally, all contractors were affected by the rise in building material prices, but the impact varied between small, medium and large-grade contractors.
"The effect of the price increase depends on the developer's or contractor's ability to secure material prices from suppliers or hardware stores in their respective locations.
"This is subject to credit terms (60 days, 120 days or 180 days), purchase quantity, source of purchase (supplier/retailer/hardware store) and logistics costs that vary by location and distance.
"This will inevitably increase construction costs," he said.
Zaid added that external factors affecting the increase in building material prices and supply also included rising raw material costs, fuel and natural energy sources, as well as transportation and logistics costs.
He emphasised that high purchase prices by contractors were also influenced by long credit terms and small purchase quantities.
"CIDB does not play a role in regulating building material prices in the country. Instead, it is influenced by market forces where supply and demand determine the prices," he said.
