It’s not just fuel that could be in short supply if the war in the Middle East is prolonged, with the building industry warning that it could result in shortages of construction materials and price hikes.

Builders are already looking for alternative routes for products out of Europe, according to Master Builders CEO Denita Wawn.

“In one instance, we've heard of a tenfold increase in the freight costs between shipping and air freight,” she says.

“It makes the feasibility of any construction project more challenging right now.”

Wawn says builders with fixed-price contracts will have to absorb extra costs.

The cost of building rose by 35.4% between the end of 2019 and the start of 2026, according to the Cordell Construction Cost Index.

Cotality's head of research, Gerard Burg, says the next index update in April will show a “relatively significant” price hike in construction costs.

He says the ongoing fuel shortage could impact the ability to move building materials around Australia.