merged image of the Ministry of Works and Transports
official report on inflation in the construction sector.
sector construction contractors say heavy traffic on the roads
has led to sharp increases in the cost of transporting buildings
materials. Photo: KEITH MATTHEWS
The cost of clay blocks has gone up by nearly 200 per cent
in the last two years. Hiring a skilled tile layer will cost
you 76 per cent more now than it did in 2004.
And if you wanted to rent an excavator in June 2006, you were
paying a rate of $627.50, which was exactly 100 per cent more
than the $312.50 you would have paid in June 2004.
Some of the price increases in the construction sector in
the last two years may sound unbelievable, even shocking.
But thats not the bad news.
The bad news is that in a very recent study the Ministry of
Works and Transport suggested that the pace of construction
T&T is now undergoing is set to continue for another seven
is presumed that the level of spending by the State at present
is expected to continue for the next seven years or so, and,
as a result, we should expect an increasing demand for more
materials and services associated with the industry,
stated a 20-page report by the ministry.
The report is titled The Impact of Inflation on the
Construction Sector in T&T from June 2004-June 2006.
It was submitted on July 12 and the title page indicates that
it is the work of the Director of Highways in the Highways
division of the Ministry of Works and Transport.
After stating that the States construction expenditure
is expected to continue for the next seven years, what the
report says next may be even more depressing for someone looking
to build a new house or extend their current dwelling place.
nothing is done to reduce the level of inflation being experienced,
prices will undoubtedly continue to rise beyond the reach
of the ordinary person.
This is clearly a suggestion that the ordinary
person can afford current prices for construction equipment,
material and labour.
The report makes some noteworthy points, among them:
the astronomical increase in the price of clay
blocks at 184.6 per cent.
mining and other associated materials/resources that goes
(sic) into the production of clay blocks has (sic) experienced
very little increases to match this inflated price for this
Quoting US Bureau of Labour Statistics, the report said internationally
readymix concrete went up by 12.2 per cent, but locally, it
went up by 188.5 per cent.
Similarly, building blocks cost nine per cent more in the
US, but grade one clay blocks in the T&T market rose by
188.5 per cent.
The report stated that aggregates used in the production of
readymix concrete have increased on average by 77 per cent,
cement by 17 per cent, rental of heavy equipment by 56 per
cent in the last two years.
But it noted that over the same period there had been a 154
per cent increase in the price of readymix concrete.
Dryly, the report commented, One may be driven to conclude
that the reason for this may be a production deficiency in
this industry or some other factor relating to a supply/demand
the other hand, concrete blocks, which consist of the same
components as readymix concrete, have risen by 51.5 per cent,
approximately 100 per cent less than the increase in
The report was compiled over four weeks soliciting information
from such sources as Bhagwansinghs Hardware, Shade Construction
Company, Coosals Block Caribbean Ltd, Junior Sammy Contractors,
Trinidad Cement Ltd and the Central Statistical Office.
During the period studied, the report noted increases in building
dressed lumber rose 30.7 per cent ($7.33 per square foot in
2004 to $9.58 in 2006)
structural steel, 65.1 per cent
cement, 16.73 per cent ($34.49 in 2004 to $40.26 in 2006)
concrete blocks, 51.5 per cent
skilled, 71.24 per cent
semi-skilled, 86.69 per cent
unskilled, 34.1 per cent
Daily-rated unskilled labour rates:
a welder, $123 in 2004 to $154.67 in 2006, an increase of
25.70 per cent
a plumber, $134 in 2004 to $200 in 2006, a jump of 49.3 per
a tile layer, $134 in 2004 to $200 in 2006, a hike of 49.3
a carpenter, $123 in 2004 to $144 in 2006, a difference of
17.1 per cent
Commenting on the report, Winston Riley, president of the
Joint Consultative Council (JCC), on Tuesday said Government
had been opting for fixed price contracts as against contracts
that contain fluctuation clauses.
He said a two-year job that would normally cost $200 million
would cost $300 million.
should manage fluctuation risk. Risk allocation and risk management
are key to this game, Riley said. There has to
be new approaches to this system.
Mikey Joseph, president of the Contractors Association,
attributed the increased cost of clay blocks to the cost of
transportmore traffic, less loads dailyand labour.
Joseph said in his opinion, those two factors were not sufficient
to drive the price of clay blocks up by more than 100 per
Regarding the report stating that the world price of steel
has been on the decline, but local prices have been rising,
Joseph said Mittal Steel Point Lisas had increased the price
of billets per tonne by US$5.
Joseph said one had to add to the world price of steel freight
cost, adding that volume purchased affects the price one was
able to source it at.
Paul Quesnel, president of the T&T Manufacturers
Association, said trucks now had to line up at quarries for
materials to keep pace with the quantity of construction projects
He said some people in the construction sector may be taking
advantage of the situation and taking prices up beyond reasonable
there is confusion in the marketplace, and things are not
running nice and smooth and evenly, it tends to produce the
environment for people to take advantage of the situation,
Stating that his house insurance is due shortly, Quesnel said
he was told by his insurance company that to build a fairly
well put away house nowadays will cost between $550
and $650 a square foot as compared to $250 a square foot two
The report describes itself as a brief study,
which should not be seen as conclusive and recommended
that further in-depth analysis be conducted by an independent
industrial economist to determine and recommend a course
of action to stem this rising inflation.