Ukraine-Russia War: The Detrimental Construction Impact in Europe, Asia, and North America
While the entire extent of the Ukraine crisis is unknown, industry experts from key construction companies are weighing in on the anticipated effects on the sector. As they seek to find construction supplies, US contractors confront a triple danger of conflict, inflation, and supply chain snarls.
Brian Turmail, Associated General Contractors of America’s vice president of public affairs and strategic initiatives, said the Russian aggression against Ukraine has already affected the price of diesel fuel, gasoline, and other petroleum products used in construction. It is therefore expected that as a result of the war and the retaliatory actions from western countries, steel, aluminum, copper, zinc, and nickel will suffer immediate price and supply increases.
Associated Builders and Contractors (ABC) chief economist Anirban Basu elaborates on possible supply chain concerns, noting that Russia is a major producer of a number of critical metals, including copper, aluminum, palladium, platinum, and nickel. Copper and nickel are particularly essential since they are utilized in the manufacturing of stainless steel.
He continued by noting that the Russians are also important oil and natural gas producers. Construction input costs are already high, and this would likely increase them more. These price rises exacerbate the pressures already being felt by people affected by shortages and supply chain concerns resulting from the COVID-19 outbreak.
Apart from rising prices and supply chain, several construction firms are already leaving Russia due to the invasion. Metso Outotec, a construction equipment manufacturer, has temporarily halted all shipments to Russia due to the uncertain and evolving sanctions environment. Dinolift, a Finnish manufacturer of access equipment, also declared it will suspend shipments to Russia and Belarus over their treatment of Ukraine.
Construction equipment manufacturer JCB suspended all operations, including its overseas export of machines and spare parts. Alimak, a producer of mast climbing and hoisting equipment located in Sweden, said that they have chosen to halt all supplies to Russia until further notice and are not seeking new sales. Similarly, Komatsu, the world’s largest maker of construction, mining, and heavy equipment, said that it will cease shipments to Russia due to present supply chain disruptions and the unpredictable financial and economic environment.
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