The conflict in the Middle East is driving up construction costs in the building and building supply industries across the country at a time when the housing crisis in Australia is at its peak, particularly with young people struggling to enter the housing market.

Businesses working in the building and construction sector are under pressure, but still operating, using a mix of rationing, price adjustments, risk management and logistical work–arounds.

Regional areas like the Snowy Monaro are hardest hit due to long supply chains and fewer distribution points. These areas commonly experience diesel supply strain, delivery delays and capped allocations.

Isaac Horneman of Kalinda Constructions, a licensed builder across Cooma and the Snowy Mountains, said the main impacts have been the uncertainty surrounding fuel supply, fuel prices and rising operating costs.

“At this stage, we haven’t experienced major supply shortages, but we have had to absorb rising operating costs, particularly relating to fuel for company vehicles and employee travel allowances,” Mr Horneman said.

“Most of our local suppliers have managed to absorb freight increases in the short term, although we have seen price rises across some materials and products.

“If freight and fuel costs continue to increase, I expect there will be further flow-on effects to material pricing in the near future.”

Mr Horneman, who has worked in the construction industry for 18 years, said the cost of completing projects is challenging.

“The cost of building generally remains extremely challenging at the moment. We are finding that projects often require multiple budget and scope revisions with clients before they become financially achievable,” Mr Horneman said.

“In previous years, that wasn’t nearly as common. Like many areas of the economy, the purchasing power of clients’ budgets simply doesn’t stretch as far as it once did.”

Mr Horneman said the issues with fuel supplies and pricing has eased in recent weeks. He said the situation is relatively stable for his business.

“Overall, conditions have remained relatively stable so far, although sectors such as plumbing, electrical and concrete products have seen more noticeable increases,” Mr Horneman said.

“Compared with COVID, the current situation is somewhat different. During COVID, the major issue was the inability to source and transport materials, which created significant delays and sharp price increases.

“In the current environment, the pressure is more closely linked to fuel, freight and the cost of moving goods.”