Economy & Politics

A lack of materials expected “until the end of the year”

As a result of the pandemic and strong demand in the United States and China, the current commodity crisis may not subside for several months, according to the Chamber of Trades. With important consequences for all actors in the country.



As a result of the pandemic and strong demand in the United States and China, the current commodity crisis may not subside for several months, according to the Chamber of Trades. With important consequences for all actors in the country.

“At the moment, it is impossible to predict whether the rise in the prices of building materials is a short-term or a long-term phenomenon.” For Henri Kox (Déi Gréng), Minister of Housing, the concrete consequences of the pandemic in the construction sector still fall within the crystal ball, even though the concrete consequences are already being felt in Luxembourg.

(FILES) This file photo taken on April 27, 2021 shows a worker sweeping inside a still-under-construction replica of the Titanic ship in Daying County in China's southwest Sichuan province. - The ill-fated Titanic which sank over a hundred years ago is being resurrected as the centrepiece of a theme park in southwest China, where tourists can splash out for a night on the true-to-size vessel. (Photo by NOEL CELIS / AFP) / TO GO WITH China-society-tourism-Titanic, FOCUS by Noel Celis and Qian Ye

Eleven Luxembourg companies in the construction sector admitted to short-time work while order books are full: this is the reality of a dynamic sector but terribly weakened by the raw materials crisis.

Due to a lack of sufficient supply of steel, wood or polypropylene elements used for piping – and the possibility of restocking – construction actors find themselves forced to postpone more and more sites, when they are not obliged to have recourse to partial unemployment. And this, even when the order books are full. Asked about the solutions envisaged to face this collateral effect of the pandemic, the tenant of the Ministry of the Place of Europe is clear.

“The realization of projects is based on private law contracts between two actors and for which the government cannot intervene”, indicates Henri Kox. In other words, the state will not directly help individuals facing delay or temporary abandonment as a result of this crisis. A situation that would “last a little”, believes Max Urbany, economic advisor to the Chamber of Trades, who believes that the shortage of materials should “probably last until the end of the year”.

Two construction workers or engineers.

Just a year ago, construction workers were the first to emerge from the lockdown. And if there has been no lack of activity since then, soaring commodity prices are making Year II of the Covid era much more difficult than expected.

This should have important consequences, both for companies and individuals. “For contracts signed on the private market, it is the companies which will have to find common ground, while the risk of seeing prices increase for the next contracts is great”, specifies the specialist of the employers’ organization. With regard to public procurement, the risks do not relate so much to the costs as to the probable overruns of the planned delivery times.

In another parliamentary response published Thursday, Franz Fayot (LSAP) and François Bausch (Déi Gréng) indicate a list of ten potentially affected sites, ranging from the future Uerschterhaff penitentiary center through the Anne Beffort international school to Mersch or the Jean-Monnet 2 building of the European Commission. Buildings in which “different parts or functions could not therefore be occupied by end users at the times provided”.

If the sector employs nearly 48,000 people, represents a direct weight of 3.5 billion euros and weighs 6% of the GDP, it remains unknown. However, in 2020, in the midst of the pandemic, its companies created 1,700 jobs, indicates the Idea Foundation.

A particularly complicated situation “for all school projects whose start dates are fixed” or for users “who are faced with an expiration of their current rental contract”, specify the Ministers of Economy and Public Works. It should be noted that the Ponts et Chaussées sites should only be slightly impacted because they only use “a smaller number of materials and products” than in the construction sector.

From Monday, the Federation of Craftsmen and Group of Entrepreneurs have an appointment with François Bausch in order to “discuss the possible means to be implemented to mitigate the consequences of the current situation”. If the question of the modalities of partial unemployment should not pose a problem, that of the penalties in the event of delays could be more difficult to solve, because envisaged in the law, just like that of the payment of the advances by the companies.


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