Industry raises alarm over rising risks
A Cyprus construction warning has been issued over the potential impact of the war in Iran, with industry stakeholders highlighting risks of rising costs, project freezes and increased pressure on housing.
The concerns were raised during a joint meeting of the Cyprus Federation of Building Contractors Associations, attended by nearly all stakeholders in the construction sector last Saturday.
Discussions focused on energy costs, material prices, potential supply chain disruptions and the risk of delays or suspension of projects, with the sector calling for timely preparation and coordinated interventions.
“Energy poverty, project freezes and rising costs”
The President of the Cyprus Scientific and Technical Chamber (ETEK), Constantinos Constanti, warned that developments could lead to “energy poverty, project freezes, increased construction material costs and reduced access to affordable housing.”
He stressed that the impact extends across the entire construction ecosystem, affecting everything from energy and costs to project delivery and final property prices.
Pressure on energy and supply chains
Particular concern was raised over mounting pressure on supply chains and market operations.
Constanti highlighted the need to address issues related to energy, logistics and profiteering, all of which directly affect project viability and costs.
Participants linked global developments to the risk of market distortions, especially in an environment of high demand and limited supply of materials. They also underlined the need for state oversight and intervention by the Cyprus Commission for the Protection of Competition to prevent profiteering or cartel practices.
Christiana Karayiorgi expressed concern about a repeat of conditions seen in previous years, stressing the need to avoid “what we experienced in 2022–2023.”
Managing costs and market pressures
The President of the Cyprus Federation of Building Contractors Associations, Stelios Gavriel, said price increases are already a central issue, with a meeting scheduled for April 6 to address how the sector will manage potential cost hikes.
He noted that discussions include stock management and whether suppliers can absorb part of the increases to avoid passing costs on to consumers.
Measures and proposals on the table
The government is expected to introduce measures to manage the potential impact of geopolitical developments.
According to Constanti, the sector is preparing to submit “five to ten implementable proposals” aimed at strengthening economic resilience and maintaining construction activity.
These proposals are expected to focus on cost management, energy issues and faster procedures to limit market disruption and support project implementation.
Growing pressure on housing affordability
Developments are directly linked to the housing market, with Constanti describing affordable housing as a “complex equation” influenced by multiple factors.
Energy costs, material prices and broader market conditions are combining to drive up property prices and limit access to housing.
Stakeholders warned that these pressures could intensify further if international conditions deteriorate.
“Projects must not freeze”
The need to avoid project freezes was strongly emphasised, with Constanti noting that continued construction activity is vital for the economy.
Any slowdown or halt in projects would have wider consequences for both the sector and related areas of economic activity. Timely interventions are therefore required to ensure continuity in an environment of heightened uncertainty.
Managing uncertainty through coordination
Overall, stakeholders stressed the importance of managing uncertainty stemming from global developments, with the key objective being to maintain the sector’s momentum while mitigating external shocks.
Both industry representatives and the Minister of Transport, Communications and Works, Alexis Vafeades, highlighted the need for coordination between the state and the private sector to ensure timely adaptation to evolving conditions.
Also read: Trump extends Iran ultimatum deadline to April 6
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