Forecasting the development of prices for construction works and materials in the construction industry in Slovakia and abroad

Abstract

This article deals with the increase in the prices of construction works and materials in the period from the beginning of 2016 to the end of 2022, when the market was and still is very unstable. The value of the price development index of construction works and materials in the most unstable period increased by 35.2 percentage points, in 15 months. Given such price developments in the construction industry, it was and still is almost impossible for contractors to adhere to contractually agreed prices in both the public and private sectors. For construction contracts in Slovakia and abroad, are mostly used types of contract prices. A contract based on unit prices, when the contractor undertakes to fulfill all conditions, provided that the actual incurred own costs and a reasonable profit are paid. A contract with a fixed price (flat price) obliges the supplier to perform work and deliveries, regardless of his own costs incurred in connection with the delivery specified in the contract. Is it even possible and expedient under these uncontrollable conditions to forecast the development of prices in the construction industry? What forecasting methods could be effective for this purpose?