Middle East tensions have pushed construction material prices to their highest level since the pandemic, increasing cost pressures on contractors, according to Kasikorn Research Center.
The centre reported that the construction material price index (CMI) and producer price index (PPI) reached new highs of 108.5 and 114.5, respectively, in March this year.
The CMI rose 2.9% from February 2026 and 2.6% from March 2025, while the PPI increased by 5.7% month-on-month and 6% year-on-year.
“The rise in construction materials, energy and transport costs, which together account for more than 50% of total costs, will further pressure contractors’ profitability and liquidity,” the report said.
Among construction materials representing more than 94% of total usage value, prices increased year-on-year, with seven of nine categories recording gains.
Steel and steel products, accounting for 24.7% of construction usage, rose 1.2%, followed by concrete products at 17.3%, which increased by 1.7%.
Other materials (15.5%), including asphalt, aluminium and sand, also saw price increases, up 8.7%; electrical and plumbing equipment (14.6%), up 3.2%; cement (12.6%), up 2.5%; tiles (6.4%), up 1.3%; and wood and wood products (3.1%), up 0.8%.
Sanitary ware (3.1%) and surface materials (2.7%) were the only categories to decline, falling by 2.5% and 1.7%, respectively.
Of Thailand’s 150,000 construction contractors, cost structures are dominated by materials at 45%, followed by operating expenses and depreciation (31%), labour (10%), machinery and equipment (7%), transport energy (6%) and utilities (1%).
The centre expects construction material prices to continue rising amid ongoing uncertainty in the Middle East, with the index projected to increase by 5-8% year-on-year in the second quarter of 2026, particularly for steel, concrete products and cement.
Somchai Sirilertpanich, chief executive of SET-listed contractor Syntec Construction, said the oil crisis is closely linked to manufacturing and input costs, particularly steel.
“We have invested 300 million baht to stockpile steel in advance to lock in prices and control costs,” he said.
“Contractors with strong cash flow have an advantage in purchasing materials in advance to manage costs and mitigate risks.”