Price doesn't go down until they sell
Prices for some construction materials have gone down, while for some prices have gone up. Vice-director of the Center for pricing, analysis and information of the Ministry of Urbanization Levon Tumanyan says that the rise and fall of prices is due to the global economic recession.
According to him, the rise and fall of prices for construction materials in Armenia don't always fall in line with prices in the global market. He says that the prices don't go down until the product has not been imported and consumed in Armenia at the price that it was imported.
Based on the information of the center from September 2008 until now, the changes in prices for construction material have affected copper fasteners, which are high in demand in Armenia. For example, within six months the price for one ton of 8 mm copper fasteners went down from 437,500 dram to 304,330 drams.
As for asphalt concrete, according to Tumanyan, an Armenian organization has improted 300 tons of bitumen and must use it all up.
"Prices for asphalt concrete have not gone down in Armenia; rather, they have gone up from 25 drams to 26 drams. In fact, you need 70-80 kilograms of bitumen to get a ton of asphalt concrete," told "A1+" the vice-director of the Center for pricing, analysis and information.
Wood material prices have also gone up from 87.50 drams for one cubic meter to 95.83 drams for one cubie meter when it should ahev been the opposite taking into account the 30% fall in prices for fuel.
A liter of benzene has gone down from 342 drams to 225 drams, while a liter of diesel fuel has reduced from 350 drams to 217 drams. "Unlike other countries, prices go down when demand goes up. Armenia lacks healthy competition. If the price for a product goes down, the demand goes down as well. But they want to sell what they have in order to gain profit," says Mr. Tumanyan.
Has the economic crisis had an impact on the implementation of state projects? In response head of the construction department of the ministry Gor Kamalyan said that the crisis and inflation have not had an impact on the projects because all construction is financed by the state. The state has already conceded funds for construction and only time will show. But the inflation of construction materials has not affected contracting organizations.
For example, head of the marketing and consuming department of the "Griar" CJSC Sergey Azaryan says that the rise and fall of construction material prices have had a positive impact on construction because the prices for materials have mainly gone down. But according to him, the issue is that there is no demand.
