The blockade of the Strait of Hormuz has disrupted critical supply chains for building materials, causing prices for petroleum-derived products like paints and insulation to surge and stalling construction projects worldwide.

The construction industry is a vital pillar of global economic growth, contributing approximately 13% to global GDP. However, construction firms report that restricted oil supplies from the Middle East have led to widespread project delays.

Masatomi Maeda, Chairman of Hiroshima-based Maeda Residence, stated that about a quarter of the company's projects have been delayed over the past month. Suppliers are unable to confirm delivery dates for items such as PVC pipes, insulation materials, and prefabricated bathrooms.

Builders note that a shortage of any single component, adhesive, or material is sufficient to slow down an entire project.

Maeda said, "We have about 20 contracted projects that cannot proceed smoothly. Completion and payment are expected to be delayed by two to three months. If sales are lost for two months, some companies will face insufficient working capital."

The construction industry heavily relies on petroleum-derived materials, and the Strait of Hormuz blockade has restricted the supply of these goods. Approximately one-fifth of the world's daily oil shipments pass through this strait.

Affected products include asphalt, insulation, lighting, HVAC equipment, plastics, and paints, whose prices have risen sharply. Concurrently, higher industrial energy costs have also increased the prices of steel, concrete, cement, ceramics, and bricks.

Noble Francis, Economic Director at the Construction Products Association (CPA), stated that some construction contractors in the UK have been notified of price increases of 10% to 30% over the next three months. The association anticipates a rise in contractor bankruptcies over the next 12 months.

Japan has already experienced significant price hikes. Yoshihide Kimura, CEO of Toyama-based construction company Fuso Corporation, reported receiving numerous emails and faxes last month notifying him of "abnormal" price increases. For instance, PVC prices surged by 70%.

Kimura mentioned that the company cannot pass these costs on to customers, as clients need to renegotiate housing loans, and this uncertainty is causing them to adopt a wait-and-see approach.

He said, "Everyone is in a difficult situation."