Building material prices drop over low demand, construction activities

This is not the best of times for dealers in building material products as business activities in that sector has remained relatively low in the past six months, BusinesDay market survey has revealed.

At Agric-Coker Market located along Lagos-Badagry Expressway, our correspondent discovered slow pace of business as traders literally jostled for customers.

Peter Onah, managing director, Pigon Investment Limited, fingered the recent crisis and insecurity that had bedevilled Northern part of Nigeria in recent times as a major reason for the slow pace of business experienced by the traders.

“The crisis has forced most traders to flee the region in safety of their lives; the recent destruction of properties has also stalled construction activity in the area,” he said, stressing that before now some traders played the role of middlemen between them (Lagos traders) and their counterparts in the North as those who bought goods, travelled and sold to the Northern traders had decided to avoid the region and ply their trade elsewhere.

“This development has forced us to depend solely on customers from the West and East who patronise us once in a while. We have even been compelled to reduce the prices of some goods to stimulate demand, attract customers and sell off our old stock but we are still faced with low patronage,” he said.

Continuing, he noted, “Before now it took us about a week to sell 1,000 square metres of floor tiles but currently it takes about a month to sell the same quantity.”

Our survey also shows that vertified floor tiles which sold for N850 at the beginning of the year at the market now goes for as low as N750.

Similarly, the price of other goods such as suspended ceiling tiles has dropped from N950 to N850, while a unit of glass block that sold for N450 at the end of last year currently sells for N400. On the average, a 5 percent drop in prices of most goods was recorded by the market.

Affirming Onah’s claims, Ugochukwu Nwabueze of Ugobiz Nigeria Limited disclosed that in his 12 years on dealing on building materials, the past few months have been the worst due to low patronage.

Nwabueze attributed the low patronage to the pressure on the economy, explaining that “some of the recent policies by the government have indirectly crippled activities in the market.”

On the level of sales, he noted that upon the few sales recorded by most traders, the profit margin was always minimal unlike before when profits were very encouraging.

Further investigation shows that the cement prices have however remained relatively stable in the past few months as the price of Dangote brand has remained N1,650 per bag it was sold January this year, while the price of Elephant Cement which currently sells for N,1620 per bag has also maintained some stability in the past few months.

By: ODINAKA MBONU