Dynamics of prices for building materials in 2009
Have you been thinking about purchasing or building a house for a long time, but still can’t come to a final decision? The financial crisis, global economic instability, the complexity of the situation in the construction industry - all these factors give rise to legitimate doubts and fears... However, right now we should not delay with the conclusions “to build or not to build”, because soon the market expects an increase in prices for Construction Materials! Want to know why we are sure of this? Check out our analytical research.
If we consider the situation as a whole, then in 2008 the increase in prices for building materials ranged from 6 to 12.5%. The main increase in prices was observed until May (for some types of materials - until August), then the situation began to change towards a decrease in the cost of building materials.
The production of building materials and, accordingly, their prices directly depend on the pace of construction, reconstruction and repair work. According to the Rosstat report, 220.75 thousand residential and non-residential real estate objects were put into operation in our country last year, the volume of construction work increased by 12.8% compared to 2007. According to the Ministry of Economic Development, the commissioning of residential buildings increased by 4.5%, but this figure is 16.1% lower than the growth rate of housing construction in 2007. The volume of individual housing construction in 2008 showed a significant increase - 104.3% compared to 2007; in the total volume of housing construction, the share of private housing construction in Russia was 42.7%.
The global financial crisis, unfortunately, has significantly affected the construction industry, which has led to a slowdown in the pace of construction of residential, commercial and industrial projects.
To make an analytical forecast on the dynamics of prices for building materials, it is necessary to consider in detail the current situation with the main types of building materials.
Raw materials (inert materials)
Inert materials are materials of natural and artificial origin that are used for the preparation of concrete and cement-based mortars.
Sand and crushed stone
In 2008, there was an increase in prices for inert building materials such as sand and crushed stone. The cost of sand in January-December 2008 increased by 14.8%, the cost of crushed stone by 18.4%, which exceeded the figures for 2007, when sand rose in price by 12.4% and crushed stone by 10.2%.
The most significant increase in prices was noted in the Central Federal District for granite crushed stone - 35%, for sand - 20-25%.
In 2009, the rise in prices stopped, but analysts do not predict a decrease in prices for these materials. An important role here is played by the fact that crushed stone and sand are used in the construction and reconstruction of roads and highways, which are financed from the Federal budget, so the demand for these raw materials is quite stable.
There are currently no significant changes in prices, but seasonal fluctuations are possible, approximately they will be about 4-5%. Prices for raw materials may vary slightly in different regions depending on the distance to the extraction sites and the cost of transportation costs.
Cement
By May 2008, cement prices rose in various regions by 6-16%. But in May, the cost of cement began to decline, which by November amounted to 30 to 40%. The decline in prices for Portland cement amounted to 14.6-25%.
In addition, many manufacturers have reduced cement production since June. According to Rosstat, the volume of cement production in 2008 decreased by 10.6% compared to 2007. Sales of cement in the fourth quarter of last year decreased by 25-30% compared to 2007.
The decline in price levels is partly due to large volumes of supplies of cheap imported cement from China and Turkey, which began after the abolition of customs duties. The Russian government abolished duties on the import of cement from January 26, 2008 for a period of 9 months. The resolution on the extension of duties has not yet been signed; the Department for Analysis and Regulation of Foreign Economic Activity will study the situation on the cement market during the 1st quarter of 2009, and this issue should be considered by a government commission in April.
In addition, according to the Ministry of Economic Development, there was a decrease in export supplies of cement by 70%.
In November, the cost of a ton of cement was 3-3.2 thousand rubles per ton. According to the Moscow Stock Exchange, the cost of cement in January was 2.2 thousand rubles, and has now dropped to 1.8 thousand rubles per ton. In January, the drop in the price index for cement was 20.96%, for Portland cement PC500 - 22.04%, for Portland cement PC400-D20 - 13.87% compared to December 2008. In the first two weeks of February, three times more cement was sold at auction than in January.
The cement industry was quite attractive for investment, so many expected a significant increase in competition due to the introduction of large production capacities, but the financial crisis made its own adjustments.
In the current situation, cement producers are having a hard time; even the leader in the production of building materials, the Eurocement Group holding, was forced to open a credit line with Sberbank for 6 billion rubles to replenish its working capital.
No shortage of cement is expected, but manufacturers will try to win back their positions, so the price will gradually begin to rise, with a possible increase of up to 10-12% by summer.
Wall building materials
Brick
Prices for ceramic bricks and sand-lime bricks in 2008 increased by 21.1 and 15.6%, respectively, which is slightly lower than the price increase in 2007, but the price increase was still significant. Like most other building materials, prices increased in the first half of the year; in the fall, prices began to fall.
Due to the slowdown in construction growth and the transition to the use of cheaper building materials, the consumption of bricks by construction organizations decreased, and many enterprises reduced production volumes.
Currently, most brick manufacturers continue to reduce prices for their products in order to increase sales. For example, all brick manufacturers in the North-West region are participating in a campaign to reduce prices for solid bricks. It is interesting that the terms of the promotion speak of an “unprecedented price reduction,” but the cost of 9-10 rubles for this type of building material can hardly be called low.
In addition, the promotion period is indicated from January 19 to March 31, 2009. Consequently, in April, producers expect a possible seasonal change in prices for their products. But, based on the current situation in the construction industry, it is most likely that brick prices will not rise in the first half of the year.
Precast concrete products
The cost of concrete in 2008 increased by 3-4%, and the price of prefabricated reinforced concrete structures increased by 7.6%. An increase in prices was observed in the first half of the year, then prices began to decline. This was mainly caused by lower cement and metal prices.
Currently, many reinforced concrete factories have reduced production volumes, some enterprises have suspended production altogether.
In March 2009, the All-Russian Congress of Concrete Producers will be held in Moscow, where industry prospects and pricing policies will be discussed.
Today it is quite difficult to make a forecast, but the increase in the share of frame-monolithic housing construction, which we have observed in recent years, an increase in energy prices and a decrease in production volumes allow us to talk about a possible increase in prices by the end of the second quarter by about 5%.
According to information from the Ministry of Economic Development, the volume of wood processing and production of wood products in 2008 increased by 1.4% compared to 2007.
The decrease in demand for woodworking products and their cost led to the fact that some enterprises began to reduce production and stop production. While in the industry as a whole there was an increase in volumes, for some positions the volumes decreased. According to the Ministry of Economic Development, the production of plywood decreased by 7%, lumber - by 9.4%, parquet - by 12.1%, window blocks - by 19.2%. At the same time, significant growth was observed for some positions. Thus, the volume of production of factory-made wooden houses increased by 41%, door blocks - by 25.3%.
Due to an increase in export duties, supplies of timber products have decreased: unprocessed wood, plywood, lumber, chipboard. At the same time, supplies of imported chipboards increased by 8.4%, and fiberboard - by 54%.
At the beginning of 2009, many enterprises that stopped production at the end of 2008 resumed their work. For example, in Karelia, half of the temporarily idle enterprises have started working again, and in February it is planned to increase lumber production by 16%.
The problem of marketing products is familiar to all timber processing enterprises, which in the Russian market is associated with low incomes of the population, and in the world market domestic products are not competitive enough.
In December 2008, the Government of the Russian Federation issued a resolution to defer export duties in the amount of 80% on round materials until January 1, 2010. Enterprises focused on exporting their products will try to take full advantage of the delay by concluding as many contracts as possible for the supply of their products, possibly by reducing prices.
Wood prices currently continue to decline, many enterprises are offering discounts and deferred payments; an increase in the cost of domestic wood is unlikely until May.
Roofing materials
Roof tiles and slate
The once popular roofing material slate is losing its position year after year to competing building materials - natural and bituminous tiles, metal tiles, roofing metal and rolled materials. In 2007, the reduction in production was 7.3%, in 2008 - more than 3%. An increase in prices for this building material is not predicted in the near future.
Natural tiles, as the most expensive material, are in the least demand during the crisis, so the increase in prices for this building material in the first half of the year can only be due to an increase in its cost, in particular, an increase in prices for raw materials and energy. Prices for imported tiles will rise, possibly increasing prices by about 15-20%.
Experts predict that in the second quarter of 2009 the Central Bank will refuse to maintain the ruble exchange rate at the current level, then in the third quarter the ruble exchange rate against the bi-currency basket will be approximately 43 rubles, and by the end of the year - 45-50 rubles. An increase in foreign currency exchange rates will undoubtedly affect the cost of foreign-made tiles.
Bituminous (bitumen-sand) tiles are becoming increasingly popular; the market for this type of tile has good growth rates and, according to experts, can largely displace metal tiles. On the Russian market, bituminous shingles are represented mainly by imported materials (Finland, Italy, Canada); part of the market is occupied by products of the Russian company TechnoNIKOL. Price increases in the first half of the year are possible by 7-10%.
Some manufacturers have already begun to raise prices for metal tiles; the price increase for this type of building material in the first quarter will be from 2 to 8-10% (depending on the manufacturer and types of coating), and until the end of the first half of the year the price increase will continue.
Multilayer composite tiles based on steel sheets are a relatively new material for our market, which has not yet become widespread, despite its good characteristics. Composite tiles are represented mainly by foreign manufacturers; the cost of this material will also increase by about 10-15%.
Roll roofing materials
Roll materials have always been in strong demand due to their low cost. Traditional roofing felt, which has a cardboard base, is gradually being replaced from the market of soft roofing materials by the more modern “European roofing felt”. If we take the percentage ratio, then the share of cardboard roofing felt in the market of roofing materials for flat roofs will be about 20%.
In recent years, the market for rolled roofing materials has been developing at a very active pace, and, mainly due to domestic manufacturers, the share of imports has been constantly decreasing. In addition, polymer roof waterproofing - polymer membranes - has become increasingly widespread. By 2010, the share of polymer membranes is projected to increase to 12%.
In 2008, there was a decrease in demand for roofing building materials; the situation will not change in the next six months.
A decrease in the profitability of the production of cardboard-based roofing felt and the demand for this material will lead to a change in the composition of participants in the soft roofing materials market. Experts predict that many manufacturers of cardboard roofing felt and small producers of euroroofing felt will leave the market.
According to some data, the TechnoNIKOL Company and OJSC Slavuta Ruberoid Plant in 2008 already occupied more than 70% of the soft roofing market. Market consolidation and the lack of decent competition can certainly lead to higher prices for these building materials.
The instability of prices for petroleum products also affects the cost of this type of building materials.
The increase in prices for euroroofing felt in the first half of 2009 is predicted to be 3%, for polymer membranes - about 5-7%.
Dry mixes
In recent years, the production of dry construction mixtures in our country has become a fairly high-tech and dynamically developing industry segment.
If we take the dynamics of growth in the production of dry construction mixtures from 2003 to 2008 (Fig. 2), then production has grown steadily, and in 2008 the volume of production of modified SSS amounted to 5348 thousand tons compared to 1533 thousand tons in 2003. The growth rate had significant fluctuations, for example, in 2004 this figure was 45%, and in 2008 - 10%. The growth rate of construction has been steadily increasing since 2005; from the end of 2005 to 2007, several SSS production plants began producing their products, and production capacity was increased at some existing enterprises. It turned out that the increase in demand for dry building mixtures coincided with an increase in offers from manufacturers.
In recent years, there has been a decrease in the share of imported dry building mixtures, but in 2008 the situation changed towards an increase in the number of imported dry construction mixtures, an increase of about 50%.
At the beginning of 2008, there was also an increase in production, but in the summer the growth began to slow down and at the end of the year there was a decline.
Analysts predict a slight decline in the production of dry building mixtures this year (about 5-7%), but a significant reduction in the share of imported mortars. In the first half of the year, a reduction of up to 15% is possible; in the second, the situation will begin to stabilize.
Many modern construction, finishing and repair and restoration materials contain cement, the price of which, as we discussed above, has decreased. This led to the fact that domestic producers, especially in the face of increased competition, were also forced to reconsider their pricing policy downward.
Under the current conditions, there is a high probability that some enterprises will cease to exist or will “go under the wing” of larger manufacturers, which, together with the activation of the construction market in 2010, will lead to an increase in prices.
In the first half of 2009, prices for dry construction mixtures will remain approximately at the same level as now.
Rolled metal and pipes
In general, in 2008 there was an increase in prices for metal products, but if we take individual items, then, for example, commercial fittings became cheaper by 0.04%, and water and gas pipes increased in price by 12%.
Today the situation on the metal market is quite difficult. There is low demand and small inventories of building materials.
At the All-Russian Conference “Regional Metal Trade in Russia” held on February 12-13, 2009, one of the leaders of the Severstal-Invest trading house, V. Bystrov, named the following figures in his forecast: the reduction in consumption of ferrous metal products in 2009 will be 25-30%.
If we consider the situation on the spot market for rolled metal and pipes, then since January 19, when the trend turned around, the ferrous metal market has grown by 10%. Electrodes and wire rose in price by 10%, channel - by 8%, and there was also an increase in other items.
The price of reinforcement has increased by 54% since January 11. In 2008, the increase in prices for fittings from January to August was 82%; this year, analysts predict the possibility of even greater growth. At the same time, it should be taken into account that in the second half of 2008 there was a sharp drop in prices for fittings; naturally, manufacturers will try to win back their positions.
A more accurate forecast on prices for metal products can be made after the end of the Fourth International Conference “Market of Rebar: Production and Consumption Trends 2009”, which will be held in Moscow on March 17, 2009, where issues of supply and demand for rebar will be discussed and a price forecast will be made for spring/autumn 2009.
We draw conclusions: when to build a house?
It is worth noting that prices for brick, cement and some other materials at the beginning of 2008 were unreasonably high, which was caused by the high demand for these types of building materials. Now manufacturers still have a “backlog” and they will not raise prices for some time. This situation may last until approximately the beginning of the second quarter of 2009.
Since this year, electricity prices have been increased, oil prices are expected to increase on the domestic market, which cannot but affect the cost of building materials, so a further decrease in prices for building materials is unlikely.
Some enterprises (precast concrete factories, brick factories and others) use forced downtime to carry out work on the reconstruction and modernization of production, which will have a positive impact on the volume and quality of products in the future, but an increase in the cost of fixed assets will lead to higher depreciation charges, which will affect the cost of products.
Currently, the construction market is still in a state of crisis and, although some design bureaus have already begun to receive orders for the development of new construction projects, a revival of the market is not predicted in the near future.
According to the forecasts of the Department of Pricing in Construction and the expert-analytical work of the Association of Builders of Russia, the fall in prices in the real estate market will continue, its peak will be in the summer-early autumn of 2009.
As global practice shows, it takes more than two years for the real estate market to recover. In 2010, the market will begin to revive; a large amount of building materials will be required, the production of which has now decreased. Then a significant increase in prices for some of the most popular building materials is possible: cement, concrete, reinforced concrete structures, bricks and others.
Thus, if you are mentally (and financially) prepared for building a house, hurry to purchase building materials right now. Our research, confirmed by the competent opinions of construction industry professionals, clearly demonstrates: a reduction in prices in the distant future is a very vague prospect, but an increase is just around the corner... More accurate forecasts can be made at the end of March - beginning of April, but it is already possible now draw conclusions that it is advisable to buy building materials for construction and repair work in the first half of 2009, since a more significant increase in prices can be expected in the future.
Traditionally, the construction season begins in March and ends with the first frost in November. This directly affects the cost of materials during construction. As in 2012, the first surge in price growth was recorded with the arrival of spring. Materials have risen in price by 2-5%.
Note to the table: The unit price of reinforcement for visual illustration was changed from RUR/t to RUR/kg.
According to the website, the largest increase occurred in solid bricks (1NF), which have risen in price by almost 30% since the beginning of the year (3 rubles per piece), and are currently sold at an average price of 12 rubles 30 kopecks.
The average cost of double brick (2NF) also increased significantly, but prices for it, having risen sharply in the spring, began to decline in the middle of the construction season. Since May 2013, the wholesale cost of double bricks has fallen from 17 to 16 rubles per piece. According to company experts, the reason for such price dynamics was overstocking - a situation in which supply exceeds demand.
“In the current construction season, we can observe a very interesting situation on the Moscow and Moscow region markets of building materials - overstocking. Manufacturers have created more products than consumers need. At the same time, in some central regions the situation is more stable and predictable - prices rise with the beginning of spring and decrease with the arrival of cold weather,” comments the general director of the site
According to the expert, this is directly related to the activity of major players - investors in the market and indirectly, of course, to the fact that elections for the post of mayor of Moscow and governor of the Moscow region will take place in the fall of 2013.
“Almost all materials wholesalers surveyed claim that government customers are freezing their projects indefinitely. This may be related to the upcoming elections. Investors are interested, first of all, not in implementing new projects, but in preserving existing ones,” says the expert.
Note that a similar situation in the building materials market was observed before the presidential elections in 2012.
Experts on the site expect a reduction in the wholesale cost of double bricks by 30-50 kopecks per month until winter. With the onset of cold weather, the price of this material, according to experts, will stop and last until spring. An increase in prices for solid bricks is not expected, and will remain at the achieved level in July 2013.
It is noteworthy that the construction off-season did not affect the cost level of ceramic blocks (380mm) in winter, however, at the height of the season, wholesale prices for this material began to rise rapidly. The cost of this item increased from 104.26 to 112.18 rubles per piece. The growth dynamics was 7.6%.
The cost of cement in the winter of 2012-2013. traditionally decreased and reached 240 rubles per bag (50 kg). With the arrival of spring, this material rose in price by 4%, but this price lasted only 2 months. In May, the cost of cement dropped again to 240 rubles and remains at this level.
Prices for concrete, having been fixed at 4,700 rubles per ton in July 2012, fell by 4.5% in January 2013, but the start of the construction season returned the cost of this material to its previous level by May. Currently, the average wholesale price of concrete is 4,700 rubles per ton.
“The prices for building materials in the estimate, of course, also affect the final cost of the house, so our clients are increasingly choosing the most optimal houses for living in terms of the use of building materials, and also pay attention to the functionality of the layout and the total area of the house.. This is connected also with rising prices for materials, and with the upcoming luxury tax law,” the CEO of the site sums up.
Choose allGravel, per cubic meter Other natural sands, cubic meters Sand-gravel mixture, per cubic meter Crushed stone, cubic meters Ordinary lumber, not included in other groups, other, cubic meters Continuously pressed particle boards, sq.m. m Summer diesel fuel, ton Winter diesel fuel, ton Other diesel fuel, ton Bitumen, t Motor gasoline, ton Diesel fuel., t Diesel fuel - winter, t Diesel fuel - summer, t Diesel fuel - other, t Paints, t Mastics , t Drying oil, t Pipes made of polyethylene, per m Pipes made of polypropylene, per m Pipes made of vinyl plastic (polyvinyl chloride), per m Windows and their frames, polymer window sills, per sq. m. m Polymer doors and their frames, per sq. m Cast and rolled profiled glass, sq. m. Faience washbasins, set. Glazed ceramic tiles for interior wall cladding, sq.m. Glazed ceramic tiles for floors, per sq.m. m Unglazed ceramic tiles for floors, per sq.m. Non-fireproof ceramic building brick, thousand standard bricks. Cement, tons Silicate brick, thousand conventional bricks. Large wall blocks (including basement wall blocks) made of heavy cement concrete, cubic meters Reinforced concrete grillage details, per cubic meter Reinforced concrete piles, per cubic meter External reinforced concrete wall panels, cubic meters Internal reinforced concrete wall panels, cubic meters Span structures reinforced concrete bridge structures, per cubic meter Blocks and tubings for tunnels and mine support, per cubic meter Ribbed and flat flooring slabs, ribbed and flat, cubic meter Hollow-core floor slabs, cubic meter Slabs, sheets, panels, tiles and similar products from gypsum or mixtures based on it, not covered or reinforced with paper or... Concrete, ready for pouring (ready-mixed concrete), cubic meters Construction mortars, cubic meters. m Corrugated asbestos-cement sheets (slate) Asbestos-cement pipes and couplings, m Ruberoid, sq.m. Other expanded mineral materials (expanded clay gravel), cubic m. Mixtures and products from heat-insulating and sound-proofing materials, not included in other groups, cubic meters. m Asphalt concrete mixture, t Rolled section and shaped hot-rolled, hot-drawn, extruded and forged from non-alloy steel, t Periodic profile reinforcement of class AIII Pipes and hollow profiles made of cast iron, t Seamless pipes for oil and gas pipelines of ferrous metals (except cast iron), t Steel water and gas pipes, t Electric-welded steel pipes, t Prefabricated building kits (modules) with coverings made of space-rod structures made of steel, per ton Prefabricated building kits (modules) with frame structures made of steel Other prefabricated building structures made of steel, t Retaining walls and mine support made of ferrous metals, per ton Sections of railway bridges made of ferrous metals, per ton Sections of automobile bridges made of ferrous metals, per ton Central heating radiators with non-electric heating made of ferrous metals, per kW Bathtubs, set. Electrical distribution and control equipment, pcs. Wires, km Cables, km Lamps and lighting devices, pcs. Linoleum, sq.m. Electricity.., MWh.
Introduction
Chapter 1. The essence, formation and role of wholesale prices of building materials in marketing 9
1.1. Marketing of wholesale prices of building materials 9
1.2. Goals and objectives of the study of wholesale prices for building materials. 14
1.3. Information base for analyzing wholesale prices for building materials 26
1.4. Structure of wholesale prices of manufacturers and dealers for building materials 32
Chapter 2. Analysis of prices on the Russian domestic market of building materials . 47
2.1. Marketing analysis of the situation on the Russian domestic market of building materials. 47
2.2. Analysis of the influence of prices on commodity market conditions in the construction industry 56
2.2.1. The situation on the cement market 56
2.2.2. The situation on the building brick market. 66
2.2.3. The situation on the market of paints and varnishes for construction purposes 74
2.3. The impact of mergers and acquisitions on the market... 86
Chapter 3. Analysis and forecasting of dynamic and structural changes in wholesale prices for building materials ... 101
3.1. Parameters and models for forecasting wholesale prices for building materials... 101
3.2. Study of price elasticity in the Russian building materials market. 117
3.3. Analysis of the influence of seasonal and structural indicators of wholesale price dynamics on the stability of the building materials market. 133
3.3.1. Analysis of cement market sustainability. 145
3.3.2. Analysis of the sustainability of the building brick market. 151
3.3.3. Analysis of the sustainability of the market for paints and varnishes for construction purposes. 154
Conclusion 158
References 164
Applications. 174
Introduction to the work
Relevance of the topic. The construction complex plays an important role in the national economy. The share of construction in the main indicators of the economy in 2004 was: in GDP (according to OKONH) - 6.6% (in 2003 - 6.4%), in the average annual number of employed - 7.8% (in 2003 - 7.7%), in fixed assets - 1.3% (in 2003 - 2%). The building materials market and its investments are one of the determining factors in the development of the country's construction complex. The cost of building materials currently accounts for 72% of the construction cost. At the same time, the cost of building materials and construction and installation work largely depends on the level, structure and dynamics of prices, which ultimately determines costs in the construction industry.
The main instrument for regulating material resources in the building materials market is marketing, the main control object of which is wholesale, which helps optimize product inventories at all levels and eliminate commodity shortages, takes part in the formation of regional and sectoral commodity markets. The main lever of wholesale trade in building materials is Wholesale price, which performs a number of functions. It acts as a carrier of information and an important tool for analysis, forecasting and planning of economic indicators of business activity, both manufacturing enterprises and intermediary trade. Accordingly, pricing is an important element of the marketing mix in construction.
It should be noted that the construction materials industry is one of the most fuel- and energy-intensive, as well as cargo-intensive industries. Currently, tariff and price pressure from monopolistic enterprises (increasing prices for gas, fuel, petrol, electricity and rising transportation tariffs) has a significant impact on the construction materials market. The volume of transportation of products and raw materials by different modes of transport is 25% of national cargo transportation, the share of fuel and energy in the structure of costs for production and sales of products in the industry as a whole is more than 16%, and in the cement industry it reaches 41%. In this regard, reducing production and distribution costs can be considered one of the primary tasks of stabilizing the building materials market. This problem can be solved with the help of effective marketing pricing tools.
Thus, in the building materials market, the main industry risks for manufacturers may include possible changes in prices for building materials, as well as possible changes in prices for raw materials and services used in production. In this regard, in the production and marketing of building materials, it is necessary to analyze and forecast the level, dynamics and structure of manufacturers' wholesale wholesale prices for building materials.
All this determined the choice of the research topic and gives grounds to consider it relevant both in scientific and practical aspects.
The purpose of the dissertation work is the development of proposals that provide the most effective methods of marketing analysis and forecasting of wholesale prices for building materials.
In accordance with the goal, the following theoretical and applied tasks were formulated and solved within the framework of the study:
an analysis of the construction materials market was carried out, and an assessment of the degree of its monopolization was obtained (using the example of individual product lines);
the main factors influencing the formation of wholesale prices of building materials have been identified;
an assessment of the degree of influence of structural components on the final wholesale prices of manufacturers of building materials was obtained;
trend, regression and cluster models have been built, allowing them to be used to influence the dynamics and seasonality of wholesale prices for various types of building materials;
forecasting of wholesale prices for some building materials was carried out.
Object of study is the building materials market of the Russian Federation.
Subject of research are the wholesale prices of manufacturing companies of building materials.
Theoretical and methodological basis of the study are the basic provisions of economic theory, the works of leading domestic and foreign scientists on marketing, pricing and statistics: Andronova I.V., Bakanova M.I., Basovsky L.E., Bashina O.E., Belyaevsky I.K., Valuev S.A., Golubkova E.P., Danchenok L.A., Dubrovoy T.A., Ilyenkova S.D., Kaltakhchyan N.M., Kendelsky M., Kiseleva I.A., Klebanova K.V. , Kovaleva V.V., Kosterina T.M., Kuznetsova V.I., Kotler F., Kotlyar E., Lapygina Yu.N., Livshits V.N., Maksimova V.F., Orekhova S.A. , Polyakova V.V., Sadovnikova N.A., Samuelson P., Skamai L.G., Utkina E.A., Heine P., Tsatsulina A.N., Yuryeva T.V. and etc.
When solving the assigned problems, forecasting methods, the index method, structural and cluster analysis were used, the SPSS statistical information analysis system, the Statistica package, and the MS Excel spreadsheet processor were used.
Research information base compiled the “Basic provisions (concept) of pricing and estimated standardization in construction in the context of the development of market relations” of the State Construction Committee of Russia; RF PP dated August 5, 1992 No. 552 “Regulations on the composition of costs for the production and sale of products (works, services), included in the cost of products (works, services), and on the procedure for generating financial results taken into account when taxing profits”; data from the Federal State Statistics Service; publications of general economic and specialized media; Internet materials; reports from manufacturing companies of building materials; reviews of the building materials market by RosBusinessConsulting, INEC and Region Group; as well as the results of surveys conducted by the author for the Marketing Union organization.
Scientific novelty The work is to develop methodological support for marketing in the building materials market in the field of analyzing the structure, relationships and dynamics of wholesale prices. The dissertation work formulates and substantiates the following provisions, which have elements of scientific novelty and are submitted for defense:
an analysis of the structure and procedure for forming the wholesale price for building materials in marketing pricing was carried out, on the basis of which:
the most significant cost elements for the final price of the product were identified and ways to reduce them were proposed;
The following factors of the internal and external environment of enterprises in the building materials market of the Russian Federation have been identified, which have a negative impact on marketing activities:
the range of building materials often does not meet the needs of construction; insufficient rates of production development; significant depreciation of fixed assets and reduction in production capacity; high level of competition; tariff pressure of monopoly enterprises (fuel, energy resources, railway transport); imbalances in the location of production facilities;
the need to improve the pricing policy in the marketing activities of enterprises on the building materials market as a way to solve these problems in modern conditions of independence of market entities has been substantiated and proven;
The following areas of marketing of building materials have been developed, providing opportunities for effective management of pricing in the construction industry:
the role of analytical studies of the internal and external environment of construction materials marketing is substantiated;
the need for building materials was calculated in accordance with the current structure of housing construction in the country;
the role of each region and group of consumers in the sales of products was assessed, the share of each type of product in the total volume of products sold was determined, which made it possible to justify individual elements of the costs of production of building materials;
an analysis of the interchangeability of various types of building materials was carried out, which made it possible to propose more effective ways of using them;
For the first time in marketing, a study of price elasticity in the building materials market was conducted, which made it possible to propose effective cost management methods:
methods for optimizing costs, including in the regional aspect, have been proposed;
estimates of intra- and inter-group price elasticity for various types of building materials necessary to ensure the effectiveness of marketing management were obtained;
Methods have been developed for using mathematical and statistical analysis for the purposes of marketing pricing management in the construction industry:
an adapted methodology for forecasting wholesale prices of building materials has been developed, the most effective forecasting methods have been identified based on the criterion of forecast accuracy; corresponding forecasts of wholesale price levels were constructed;
the methodology for analyzing seasonal and structural indicators of the dynamics of wholesale prices for building materials has been improved, the relationship between seasonality indicators of production and prices and price elasticity in the building materials market has been assessed.
The noted results correspond to paragraphs. 3.7. “Technologies for conducting marketing research of markets for goods and services”, 3.12. “Factors of consumer behavior and their use in the formation of management decisions”, 3.13. “Marketing aspects of product/project and assortment management”, 3.18. “Development of distribution and dealer networks for product sales; marketing management of wholesale and retail operations" passport of specialty 08.00.05 "Economics and management of the national economy (marketing)".
Theoretical significance and practical value of the work. The results of the study can be qualified as a contribution to the scientific theory of market research and pricing, which has important practical significance for the effectiveness of marketing activities of enterprises in the building materials market.
The developed recommendations and proposals can be used by production, sales and trading enterprises of the building materials market in preparing and conducting marketing research, as well as in order to improve product and pricing policies, and establish optimal market prices for products and services.
The main provisions of the work can be used in the educational process of universities when teaching the following disciplines: “Marketing”, “Marketing pricing and price analysis”, “Statistics”, “Logistics”, etc.
Testing and implementation of work results. The main results of the work were reported and approved: at a meeting of Marketing Union CJSC, at which they were accepted as recommendations in making management decisions, Moscow, 2004; at the joint meeting of the Department of Marketing and the Department of Strategic Management and Human Resource Development of MESI, Moscow, 2005.
Publications. The main provisions of the dissertation are reflected in 6 scientific articles by the author with a total volume of 1.5 pp.
Work structure is determined by the objectives of the study, reflects its logic and consists of an introduction, three chapters, a conclusion, a list of references and appendices, contains 38 tables, 37 figures and 4 appendices.
Information base for analyzing wholesale prices for building materials
Observation of individual current prices is the starting point for any generalizations and characterizations regarding the level of market prices. Based on individual prices, average prices are calculated for types and groups of goods. In pricing, the calculation (forecast) of average prices often precedes the determination of individual market prices.
Regional centers for pricing in construction (http://www.mccs.ru/), functioning in order to implement pricing policies and provide information to participants in the construction complex, publish quarterly on a commercial basis data on the level of wholesale prices for materials, products and structures used in the region for construction, the cost of operating construction machines, transport and other services; as well as prompt tracking and publication of changes in current prices with the development of corresponding indices (including forecast prices). Since all the information necessary to perform these tasks is located in construction and installation organizations, RCSCs were created as self-supporting organizations with the participation of construction firms (joint-stock companies, corporations, territorial construction organizations, etc.). The activities of the RCSC are carried out on a contractual basis at the expense of contractors, customers and other organizations.
The functions of national and regional information support are performed by the Federal State Statistics Service of the Russian Federation (http://www.gks.ru). FSGS (formerly Goskomstat) publishes in its publications once a month regional average producer prices and consumer prices for commodity groups of construction materials, and also twice a year in the form of price indices presents the dynamics of domestic wholesale prices. A significant role in providing information to participants in the building materials market is played by independent information centers operating on a commercial basis, tracking current prices for resources and publishing price information and other calculated indicators. Unlike RCCS and Goskomstat, these information centers provide information not on the price level, but on specific price offers from manufacturers and wholesalers of construction materials. The information base for analyzing wholesale prices is the price lists of manufacturing enterprises and wholesale trading organizations. The greatest interest of market participants is generated by commercial publications that print price information weekly. In addition to specialized publications in the press, the Internet sites of manufacturers and dealers themselves, as well as organizations specializing in relevant information support, can serve as a source of information.
Of the total mass of specialized commercial publications and Internet sites, only those that contain specific line-by-line information about the current prices of manufacturing enterprises or specialized trading organizations are suitable for price analysis. Most publications are eliminated because... they publish information expressed not in specific digital, but in verbal form like: “Price from...”, as well as emotionally expressed assessments like: Prices are low, profitable, acceptable, etc.,” “Factory prices,” “At prices below factory" etc.
Commercial publications that publish price information suitable for analysis can be divided into those that specialize in one (possibly two) product group, and those that cover several product groups of the building materials market. In the first case, these are mainly magazines containing prices for various metal-containing products: ferrous rolled metal and pipes, non-ferrous rolled metal, stainless steel, hardware, pipeline fittings, cables and wires, metal structures). The most authoritative publications here are “Metal Bulletin” with world prices, “Metal Courier” with prices of CIS countries and “Metal Market” (supplement to the magazine “Metal Supply and Sales”) with prices of Russian regions. Reviews of dynamic changes in prices for cable and wire products are periodically provided by the publishing house "Marketing Union" in the industry magazine "Cables and Wires". There are also industry websites on the Internet. The most authoritative website for participants in the ferrous and non-ferrous metals markets is www.metaltorg.ru, which contains price statistics on the Russian and world markets, as well as regional price indices on the domestic market for a certain period in free access. No less popular is the website www.rusmet.ru, which provides publicly available monitoring of price changes for certain types of rolled metal products over a certain period. The Rusmet.Ru portal publishes in electronic and printed form the analytical review “Russian Metals Market”, which presents factory and market prices with an expert and mathematical forecast for 3 months in advance. On the websites www.ruscable.ru and www.tradecable.ru for participants in the cable and wire products market, reviews of dynamic changes in prices for cables and wires provided by the Marketing Union publishing house are published.
The situation on the building brick market
Building brick was in the past and remains the most preferred material in housing construction in the present. A simple, reliable method of construction, low operating costs and durability of structures are quite compelling arguments in favor of using brick. Based on their composition and production method, bricks are divided into two groups - ceramic and silicate. The production of ceramic bricks predominates, which, thanks to its physical and mechanical properties, in particular equilibrium hygroscopic humidity, creates a healthy, comfortable indoor climate.
Currently, brick production in Russia is at a relatively higher technological level than cement production, due to the fact that domestic companies preferred to purchase production lines abroad. Improvements in technology aimed at reducing material and fuel consumption, automation of thermal and chemical processes have improved the quality of raw materials by enriching them, creating the basis for reducing the cost of bricks and increasing their quality. In this regard, the rate of increase in prices for brick producers is significantly lower than the same indicators for the cement industry (see Table 2.4).
The main direction of development of the industry is the development of new types of bricks, which may be in demand in the construction of housing. At the same time, the majority of Russian enterprises have incomplete utilization of existing production capacities. In brick factories, as in all Russian industry, there is a high percentage of worn-out equipment.
The constant need for the construction of residential buildings is a constant factor in the need for increased brick production. The negative attitude towards brick, cultivated for decades, has not justified itself. The need to build cottages, single-family houses, and monolithic brick buildings is gradually increasing the demand for bricks. The main consumers of building bricks are construction organizations engaged in housing, civil, industrial and civil and other types of construction, as well as private individual developers. For construction organizations, the goods produced are ready-made residential, civil, industrial buildings and special structures built to a specific order of a particular customer. The demand for building bricks by consumer groups, depending on the purpose of the buildings under construction, can be distributed as follows (see Fig. 2.3)
The Russian market for building bricks is qualitatively characterized by the presence of a significant number of manufacturers and a pronounced regional character; brick factories are located everywhere, both in regional and district centers, and in villages and other settlements (as a rule, near sources of necessary raw materials). In addition, brick production is organized not only at specialized building materials enterprises, but also at enterprises of metallurgical, mechanical engineering, chemical complexes, mining industries, fertilizer production enterprises, as well as light and food industry enterprises. Currently, about 350 enterprises producing building bricks are registered in Russia, of which 23 enterprises have an annual productivity of over 50 million bricks per year. Building brick is predominantly a local material, in order to satisfy the demand for which in most regions, territories, and republics of Russia, bricks produced in their own or, in extreme cases, neighboring regions are used and practically no supplies from abroad are involved. The exception is large cities and their suburban areas, when the volume of own production is not enough to cover the need for bricks, or the construction of large facilities based on individual projects, as well as luxury construction. Thus, bricks are supplied to Moscow and the Moscow region from many regions, both the Central region and other regions of the European part of Russia, as well as from Belarus and other foreign countries. The largest volumes of brick production are observed in the Central and Volga districts (see Fig. 2.5), which, according to the State Construction Committee of the Russian Federation for 2004, account for 32% and 31% of the total Russian production volume, respectively. It should be noted that the volume of import supplies is 0.5-0.7% of the all-Russian volume of brick production and does not have a significant impact on the domestic market.
The impact of mergers and acquisitions on the market
The problem of studying market processes of mergers and acquisitions has become extremely relevant in the last decade, since activities of this kind have acquired a wide scope. It often threatens the stability of the economy. In the specialized literature, such activities are called in one word - mergers, which in a broad sense is understood as a process during which one company is formed from several companies. However, legal science and accounting require splitting this category into procedures for mergers (mergers) and acquisitions (acquisitions). This complex and controversial process manifested itself in the cement industry and certainly affected the level and structure of prices for cement products.
As a result of a merger, several companies are combined into one. In this case, as a rule, there is one “acquiring” company that initiates such a transaction and has more powerful economic potential. A distinctive feature of a merger transaction is that the shareholders of the “acquired” company, after the merger, retain their rights to the shares, but of the new, united joint stock company. Naturally, this process is similar to monopolization and, as a rule, the dictatorship of the producer over the consumer. As a result, this leads to an upward trend in prices. The takeover procedure is distinguished by the fact that here the acquiring (absorbing) company buys all or most of the shares from the shareholders of the acquired (absorbed) company. Thus, the shareholders of the acquired company lose their rights to a share in the capital of the new merged company. Mergers and acquisitions activity refers not only to the acquisition of the entire or major part of any business entity, but also to the alienation, sale of divisions, subsidiaries, and changes in the ownership structure of the company. Mergers and acquisitions (M&A) are a procedure for changing ownership or changing the ownership structure of a company, being the final link in a system of measures for its restructuring.
Mergers and acquisitions are one of the main methods for implementing the development strategies of a company, in particular a construction company. If a company occupies a good position in the market, being in an industry that promises it good development prospects, but it needs to strengthen its position to achieve competitive advantages in the industry, then, using the mechanism of mergers and acquisitions, it can achieve its goal by merging or acquiring companies that same market segment;
Often, a company can carry out mergers/acquisitions of companies from other market segments to reduce the risk of its activities (which is achieved, for example, through the release of heterogeneous products, products at different stages of their life cycle, through geographic diversification in product sales - that is, in other words, through diversification of production) to expand the scope of its presence;
If a company reconsiders its position in the market, finds new priorities, identifies the main areas of its activities, freeing itself from non-core, problematic areas, and, finally, if the company simply lacks money, then it can effectively use the mechanism of mergers/acquisitions for sale or the separation of individual divisions or subsidiaries.
The process of mergers and acquisitions is almost always associated with shareholder entrepreneurship. The emergence of the institution of mergers and acquisitions in the new Russia began approximately in the mid-90s. In 2005, according to the Mergers.ru portal, the volume of mergers and acquisitions in Russia reached a record level of $58.9 billion, which is 157.2% higher than in 2004. Based on the number of transactions in 2005 (1285 transactions) exceeds the previous year by 437.7%. According to a study conducted by ICG ConsultProm, the growth rate of mergers and acquisitions in Russia exceeds the world average growth rate by more than 3 times. However, the share of mergers and acquisitions in the country’s GDP is approximately 2 times lower than the world average. According to some forecasts, if growth rates continue, the world average level of mergers and acquisitions in Russia could be reached by 2010.
The existence of these processes is an integral property of the domestic market economy, as well as the processes of purchase and sale. Mergers and acquisitions are the same processes of purchase and sale, only the object here is control over the company’s property. It is believed that mergers and acquisitions contribute to greater efficiency of the company due to the fact that the new owner considers the amount paid to be lower than the real one, and plans to make greater profits than the previous owner by integrating the company into its production and financial chain and realizing various kinds of synergies. Due to the peculiarities of Russia, including the undervaluation of assets, almost all mergers and acquisitions in Russia are effective, in contrast to foreign practice, where more than half of the transactions do not pay off. For Russia, therefore, this is, first of all, a way to accumulate capital, a way to quickly increase its market share, and also, most importantly, a form of investment. After a merger or acquisition, as a rule, investments, changes, and modernization of production (development - enterprise development) occur, even if this is a speculative transaction. The funds used to carry out a merger or acquisition come, among other things, from offshore (English offshore - special market zones), thereby facilitating the return of capital to Russia.
Study of price elasticity in the Russian building materials market
The elasticity of market conditions is due to the manifestation of the market law. In particular, the essence of the elasticity of supply and demand lies in their variability depending on the influence of various socio-economic factors, and, first of all, prices. However, for the purpose of the most complete analysis of the phenomenon of price elasticity, price in a number of cases is considered not only as a factor attribute, but also as an effective one. The influence of key market indicators on prices is examined to identify significant price-forming factors. Regardless of from what point of view the price is considered, the measure of elasticity is a relative indicator - the elasticity coefficient: the percentage change in the resultant attribute when the factor attribute changes by one percent.
One of the most important factors in pricing in the building materials market are production factors included in the so-called. "magic price triangle" These include: production capabilities, costs, financial condition and economic dynamics. Determining the relationship between production factors and price makes it possible to establish the price level that is most adequate to a particular volume of output. For example, an economy of scale strategy makes it possible to set lower prices than competitors. In this regard, enterprises in the building materials market need to determine the nature of the relationship between production volumes and price levels.
The regional level of price statistics is an area of interest for both national and regional management. Here the specific problem of assessing regional price differentiation is solved. The author conducted a regional analysis of the dependence of cement prices on production volumes. In order to obtain generalized data, during the analysis process the territorial units of the Russian Federation under consideration were combined into four clusters according to price levels for the period from 1998 to 2003. (using the STATISTIСA package). The availability of information on output volumes in value terms made it possible to calculate average prices by region based on the weighted arithmetic average formula (product output indicators act as weights). When determining the average price in each cluster, data on the number of manufacturers of building materials in the relevant areas were used as weights. Groups of areas in Table. 3.6 are arranged in ascending order of average price.
Based on the obtained levels of average prices for groups of regions of the Russian Federation, we can draw a conclusion about the degree of competitiveness of territorial markets for building materials: the smaller the number of manufacturers, the higher the price of the product, and vice versa. The exception is cluster 1, where the number of producers is 3. This can be explained by relatively high (compared to the Moscow region) production volumes. It should also be noted that the Moscow region has the highest rates of product consumption (see Table 3.21). In increasing order of average prices for building materials, the districts of the Russian Federation can be arranged in the following sequence: Southern - Ural and Siberian - Northwestern and Central. (See Appendix 4). You can also separate the Moscow region from the Central District, which is characterized by the highest prices. In order to analyze the mutual influence of prices in various districts (clusters), the author constructed a multiple regression model of the dependence of cement prices in the Moscow region on the price level in other regions. The cluster model according to the given data has the form: y = 72.68-0.62 x1 + 0.68 x2 + 0.95 x3, where y are prices for cement in the Moscow region, x1 are prices in the Volgograd, Bryansk regions and Karachaevo -Cherkess Republic (Cluster 1), x2 – prices in the Kemerovo, Sverdlovsk, Ryazan regions and Krasnodar Territory (Cluster 2), x3 – prices in the Belgorod, Leningrad and Lipetsk regions (cluster 3). The constructed model is characterized by high forecast accuracy (correlation index is 0.999; F-observed = 442.93 F-critical = 3.24) and reflects the greatest direct dependence of cement prices in the Moscow region on the price level in the North-Western District, i.e. . cluster of regions with relatively high price levels.
The coefficient of price elasticity of building materials depending on production volumes reflects changes in prices over time or in comparison with some other unit of the population. Price elasticity is determined by the formula of the empirical elasticity coefficient: where: and is the resulting attribute (price) of the base and reporting periods, respectively; and – factor characteristic (production output) of the base and reporting periods, respectively.
The high degree of price response to the factors being studied allows for the effective use of building materials market management tools. Calculations made in accordance with this formula revealed the following elasticity coefficients of cement prices by regional clusters in 2003, compared to 2002: cluster 1 – 0.81, cluster 2 – 0.79, cluster 3 – 2.20 , cluster 4 – 1.05. Thus, we can conclude that clusters with minimal average prices (Southern, Ural and Siberian districts) are characterized by infraelastic prices for output, that is, here cement producers adhere to a marketing strategy of relatively stable, but high, cement prices. This can be explained by the goals of compensating for fluctuations in sales income during periods of production decline; in other words, such a strategy can be classified as one of the types of business risk insurance. Clusters containing large regional centers are characterized by greater price elasticity for cement production. In cluster 3, which contains the Leningrad region, ultra-elasticity is observed, that is, prices subtly respond to fluctuations in output. Cluster 4 (Moscow region) is characterized by prices close to unitary ones, that is, changes in production volumes can lead to only an insignificant commercial effect.
