Published on:
December 13, 2023
Inflation has been impacting nearly every commodity, and the construction industry is no exception to this trend.
A screenshot of The Business World article on construction material price growth last January 2023
This news article from The Business World last January 2023 reflects how the price growth of construction materials in the Philippines has reached a 14-year high according to the data from the Philippines Statistics Authority (PSA). Although a following report in Oct. 2023 suggests that the price of construction materials has eased by a bit – it is still something of concern for construction companies like yourself looking to boost growth and profitability.
A screenshot of The Business World article on slower construction material price growth in Oct. 2023
The rising cost of materials poses a significant concern for construction companies due to its profound impact on project budgets and profitability. Fluctuations in material prices can lead to substantial cost overruns, making it challenging to accurately estimate and manage project expenses. This not only jeopardizes the financial viability of ongoing projects but also affects the ability to competitively bid on new contracts. Moreover, increased material costs can strain relationships with clients, as they may not be willing to absorb these additional expenses. Construction companies must also contend with the potential for delays caused by material shortages, which can further hinder project schedules and incur additional labor and equipment costs. In sum, the escalating cost of materials underscores the need for vigilant cost control measures and effective procurement strategies to navigate these challenges and maintain financial stability in the construction industry.
Construction companies can optimize materials management by leveraging technology and software solutions. Utilizing construction-specific software can enable real-time tracking of materials, from procurement to usage, enhancing transparency and efficiency. RFID tagging and GPS technology can help monitor material locations, reducing the risk of theft or misplacement. Additionally, software can facilitate accurate inventory management, enabling timely reordering and minimizing waste due to overstocking or understocking. Advanced analytics within these systems can provide insights into material consumption patterns, aiding in precise project budgeting and procurement planning. Moreover, automation of materials management processes streamlines workflows, reducing human errors and administrative overhead. Ultimately, technology and software-driven materials management not only enhances security but also promotes cost savings and project timeline adherence, making it an essential tool for construction companies seeking to optimize their operations.
Reach out to Steer’s digital transformation evangelist HERE to understand how technology-backed effective materials management can potentially help your organization reduce the impact of instances like the one above.
