Construction tender prices increased by 2.9 per cent in the second half of 2016, according to the latest Tender Price Index, published by the Society of Chartered Surveyors Ireland (SCSI ). According to the index, prices increased by 6.3 per cent for the year as a whole.
In recent years, the trend with tender prices has been one of consistent increases. They rose by 5.5 per cent last year and five per cent in 2014. The SCSI is predicting a rise of 3 per cent for the first half of 2017. While the index relates to non-residential construction projects, the SCSI said it was inevitable that rising prices would have a knock-on effect on housebuilding costs.
Micheal Mahon, chairman of the Quantity Surveying Professional Group of the SCSI, said that while the rate of increase is higher in Dublin, price inflation is also now being experienced in the regions.
“The continued rise in tender prices is reflective of the increasing level of construction activity across the country, most notably in the greater Dublin area, where tender price inflation was 3.4 per cent in the last six months of 2016,” Mr Mahon said.
“Outside of Dublin the figure was 2.5 per cent. This is in line with expectations as construction activity continues to increase year on year albeit from a very low base. For the first half of 2017, we are forecasting a similar trend with prices rising at 3.3 per cent in the greater Dublin area and 2.8 per cent elsewhere.
“It would appear that there is an increasing amount of construction activity being undertaken in the regions as well as a migration of contractors and labour towards the greater Dublin area, particularly from the commuter belt counties, resulting in fewer resources within the regions to undertake construction works. This has led to a shortage of resources across multiple trades for both main contractors and specialist sub-contractors.”