Detail commodity value fluctuations, hard work policy adjustments, and the effect of geopolitics on the origin chain
Kuwait: Rising raw curtain costs, emerging logistics costs, and shortages of curtain sources have been attributed to an accumulation in structure costs in Kuwait, according to a report released through Kuwait’s “Markaz” Financial Center titled “Kuwait Construction Costs and Components. “The report thoroughly analyzes the reasons for emerging structural costs in Kuwait and the greater GCC region, highlighting rising commodity costs and emerging inflation in global economies as two of the main drivers of this shift.
According to Markaz’s report, significant increases in the value of number one unfired fabrics, such as structural metal beams, reinforcing metal, softwood for frames, copper pipes and copper cables, in addition to the shortage of labor in the GCC structures sector, are known as reasons for the sharp increase in the prices of the structures in recent years.
Examining the effects of higher inflation on economies around the world, Markaz’s recent report looks at the emerging costs of imported goods and their effect on progression costs in the Gulf region. Gcc.
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In line with global changes, the structure industry in Kuwait lately is consistent with a structure in structure charge due to emerging hard work charges, emerging costs consistent with transportation charges and charges, according to the report. As of February 2022, the structure charge of one square meter for an average individual house estimated at KD 230, compared to pre-pandemic rates of KD 170 per square meter, marking a structure of about 35% when contemplating fabrics and hard work expenses.
According to these figures, the cost of building a single-person house with a built domain of 1240 m² went from KD 210 000 (KD 170/m²) before the pandemic to KD 285 200 (KD 230/m²). This equates to USD 741 per square meter which, despite inflated costs, is still lower than the cost of building high-rise villas and villas in Saudi Arabia and the United Arab Emirates, which average USD 1396/m² and USD 1835/m². . respectively.
Kuwait’s declining construction costs, relative to improved market conditions, can be attributed to the government’s willingness to offer subsidized values in construction fabrics, in addition to implementing price-tracking policies and prohibiting the import and re-export of essential construction fabrics. like wood and iron.
In addition to looking at adjustments in Kuwait’s structure sector, the report notes how broader projects to employ Kuwaitis and higher repatriation rates after COVID-19 and more inflexible residency policies have altered structure prices in the country. Kuwait’s expat population was estimated at 3. 34 million in 2019, a figure that has since fallen to 3. 15 million measured in the first part of 2021. With the decrease in the availability of labour, labour prices have increased in Kuwait. The average monthly salary of personal sector expatriates increased by about 6% per year. year-on-year in March 2022.
Since Kuwait relies on imports of fabrics such as iron, metal and copper wire, emerging global costs have affected structure costs, according to Markaz’s recent report. countries like China and geopolitical problems in Russia and Ukraine.
In Kuwait, the series of value increases for structural assets ranged from 8. 7% to more than one hundred percent from January to early June 2022. In May 2022, the price of iron was KWD 280 per tonne, compared to KWD 248. per tonne in June 2021, while it fell to 195 KD/tonne in September 2022. The price of cement rose moderately from KD 1. 1 before the pandemic to KD 1. 25 per bag in February 2022, thanks to value subsidies provided by the Government of Kuwait. From the beginning of 2020 to May 2021, the metal’s values rose almost 50% to 254 KD per tonne. Markaz’s recent report also highlights the value of locally manufactured metal bars, which increased by 37. 2% in one year. Annual comparison measured in March 2022. Si while global oil values have soared, gas values in Kuwait have remained unchanged since the beginning of the pandemic, with the exception of Gas Oil and Gasoline 98 (Ultra).
Rising structure costs in Kuwait and the GCC imply adjustments to the global supply chain, raw costs, and global socio-economic policies. While raw material costs are expected to remain above their five-year averages, steel costs are expected to remain at traditionally higher levels. According to World Bank estimates cited in Markaz’s report, commodity, steel and energy costs are expected to decline in 2023, although they are expected to remain high.
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About Kuwait Financial Center “Markaz”
Established in 1974, Kuwait’s K. P. S. C “Markaz” monetary center is one of the leading investment banking and asset control establishments in the MENA region with total assets under control of more than KD 1. 16 billion as of June 30, 2022. Over the years, Markaz has pioneered innovation through the emergence of new concepts that resulted in the creation of new investment channels. These channels have unique features and have helped Markaz broaden investors’ horizons. Examples come with Mumtaz (the first national mutual fund), MREF (Kuwait’s first genuine real estate investment fund) and Forsa Financial Fund (the first and only market maker of GCC features since 2005), all conceptualized, established and controlled through Markaz. Markaz indexed on the Kuwait Stock Exchange in 1997.
For information, please contact: Sondos Saad Media
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