Thailand Building Material Costs Set to Surge 20% in 2025

TTB Analytics forecasts that Thailand's building material production costs will rise approximately 20% in 2025 compared to the previous year, driven by higher energy costs, transportation fees, and raw material prices amid ongoing uncertainty from the Middle East conflict. Plastic manufacturers are expected to face the most severe impact, while small and medium-sized producers—already vulnerable with low profit margins and limited cost-absorption capacity—face compounded pressure. The economic think tank recommends businesses accelerate cost management, strengthen supply chain flexibility, and adjust business models to maintain profitability amid volatility.

Thailand's construction materials industry has struggled for years due to sluggish private sector investment, particularly in residential real estate weakened by consumer purchasing power, high household debt, and strict credit policies. With limited ability to pass cost increases to customers compared to periods of strong demand, producers face mounting pressure from the sector.

In 2025, the US-Iran conflict escalating into a regional crisis, with threats to close the Strait of Hormuz—a critical global shipping route for crude oil and petroleum products—will disrupt not only global energy supply chains but also building material production that relies on petroleum-derived raw materials and upstream commodity supplies from the Middle East. The prolonged uncertainty in the Middle East makes it unlikely that global crude oil and petroleum supplies will normalize in the short term, creating unavoidable pressure on construction material production costs.

TTB Analytics estimates 2025 production cost increases of around 20% year-on-year, based on three main components: energy costs, transportation costs, and raw material prices, broken down by producer type.

Metal products manufacturers generate approximately 770 billion baht in revenue, or 56.7% of total construction materials industry revenue. Although they face no direct supply chain disruption from petroleum products, Thai producers import primary and intermediate steel from China as raw material, with prices rising an average of just 8% from March to June. However, transportation costs surged, reflected in the Shanghai Containerized Freight Index rising 39% over the same period. TTB Analytics forecasts metal products manufacturers will see average cost increases of 25% in 2025.

Concrete and concrete products manufacturers generate approximately 310 billion baht, or 23.2% of total construction materials industry revenue. Costs are expected to rise an average of 11% in 2025, primarily from domestic transportation costs, as the concrete industry relies heavily on local supply.