Prices for construction materials were 17.4% higher on average in December compared to the same month of 2020, official data shows.

It was the biggest year-over-year price hike in 14 years, according to data from the national statistics agency INEGI.

Among the materials whose prices increased substantially were sheet metal, up 58%; metallic structures, up 49%; rebar, up 43%; plywood, up 36%; wire and wire rod, up 35%; plastic pipe, up 34%; lumber, up 31%; and electrical cable, up 30%.

Paint, glass and cement prices also increased albeit by a more modest 20%, 17% and 7%, respectively.

Behind the price hikes were higher international prices for raw materials and shortages due to supply chain problems, according to experts cited by the newspaper Reforma. Higher prices for raw materials such as steel, aluminum, copper, plastic and wood were the result of higher energy costs, they said.

The increased costs for builders will have a knock-on effect on prices for new dwellings, the president of the Mexican Chamber of the Construction Industry told Reforma. Francisco Solares Alemán also said that budgets for public and private infrastructure projects won’t go as far as they otherwise would have gone.

He added that cement companies recently announced price hikes of 15% to 20% due to higher overheads including increased energy costs.

Solares noted that inflation in the construction sector is 10 points higher than general inflation, which is currently above 7% – its highest level in more than 20 years.

“The outlook is not good,” the building chamber chief said, explaining that global steel shortages are expected to continue during at least the first quarter of 2022. “That will cause the price of the material to go up again. All these high prices … will hit the price of new homes.”

With reports from Reforma