Forecasting prices for the main building materials in a context of uncertainty: method and practice

Abstract

Introduction. The purpose of the study is to evaluate and forecast the behaviour of prices for the main building materials in a highly uncertain and risky environment using the price behavior forecasting method that takes into account external conditions. Materials and methods. A forecast, made in a context of uncertainty, typical for the current economic situation resulting from geopolitical changes, should take into account results of calculations, the experts’ input, variability of scenarios, and a continuously verifiable and updatable mathematical model. The authors propose a method to forecast materials prices in a context of uncertainty. The method is based on a ranked sequence of actions which is refined on a step-by-step basis. Results. The method proposed by the authors was employed to calculate and verify the forecast price of the main building materials (reinforcement bars and ready-mix concrete) in June to December 2022. The author offers scenarios, showing the behaviour of prices for the main building materials in 2022 with account taken of the key factors of risk. Conclusions. The need for a method to forecast building materials prices in a context of uncertainty was evident. The research method was tested, and prices for the main building materials (reinforcing bars and ready-mix concrete) were analyzed. The upward price trend was substantiated for all construction market scenarios during the forecast period. Key factors, affecting the probability of each scenario, were identified. The author substantiated the need to continuously monitor the financial model of investment and construction projects to take risk into account.