Inflation in the Price of Building Materials in Thailand

metalOne thing about it – it has been an absolutely horrendous year for anyone building a house. As you have heard there has been a tremendous explosion in the cost of basic materials here in Thailand, from cement used extensively in cement block houses, the actual cinderblocks, red bricks or Qcon blocks, wood used for formwork, sheetrock gypsum board using in ceilings, and on and on and on – prices are up across the board. Two of the big budget items for a concrete block house (of which the vast majority of houses built here are) are indeed the cost of steel and concrete (which is comprised of the cost of cement + aggregates which added together make concrete). The highest price increases have been recorded in the price of steel which is used extensively in the type of concrete construction used here in Thailand – as a re enforcing agent for foundation work, ground beam, support columns and then as the material in the roof truss.

I often get asked about how much more it would cost to build a house now vs. some time in the past. An INFLATION INDEX of building materials would be useful, as it would help us to compare past project budgets with proposed future projects and weigh the viability. It does involve a lot of assumptions, but the methodology is a follows:

  • Compute the actual percentage increase in the price of 2 key components – steel and cement.
  • Estimate the increase in the cost of labor from anecdotal evidence.
  • Estimate the percentage of costs involved in a sample build as to Steel, Concrete, Other build materials and labor.
  • Compute the increase in percentage terms from January 1, 2008 to the current date.

Here are the actual figures for steel and cement as to actual purchases made at dealers in Pattaya. There may and will be some cost differential in the provinces but percentage increases should be about the same. As you can see, the cost of steel has had the most dramatic increases, due mostly to the fact that it is influenced by international factors, where the price of cement is sourced locally and relies more on local cost factors.

Specification (English) Specification (Thai) Price Jan 1, 2008 Price Aug 21, 2008 Increase
Rebar 2 Hun 6 mm. SD30 (Dem) เส้นกลม 1/4 (มอก) โรงเล็กทั่วไป 50 82 64%
Rebar 3 Hun 9 mm. SD30 (Dem) เส้นกสม 3/8 โรงเล็กทั่วไป 102 155 51%
Rebar 4 Hun 12 mm ribbed surface SD30 ข้ออ้อย 12 มม (เหลือง) 199 295 48%
Steel Weighted Avg Price Increase 55%
Cement 50 KG Bag Portland In See Phet (Diamond) อินทรีเพชร 130 150 15%
Cement 50 KG Bag Nok In See Daeng (Red) อินทรีแดง 115 127 10%
Cement Weighted Avg. Price Increase 13%

Category % of Build Amt Jan 1 2008 Increase Amt Aug 21 2008
Labor 18 % 180,000 10% 198,000
Concrete 10 % 100,000 13% 113,000
Metal 11 % 110,000 55% 175,500
Other 61 % 610,000 20% 732,200
Total 1,000,000 21.85% 1,218,500

The good news is even though metal is up 55% year to date, actual costs have only increased about 22%.

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