Construction cost quotes rise by 3%

The amount of money being quoted by building firms for large scale construction jobs increased by over 3% in 2013, and is expected to continue to grow moderately during this year.

Last year’s increase was driven by a marked surge in quoted costs in the second half, with a 2.2% rise following on from one of just 0.9% in the first six months. The figures, published by the Society of Chartered Surveyors of Ireland (SCSI) and relevant to any building project worth over €500,000 in value, show that construction tender prices, here, are nearly 30% lower than their 2007 peak.

“They are still some way below prices back in 2000, which means that planned Government expenditure on construction and infrastructure projects remain at very competitive prices,” SCSI president Micheal O’Connor also noted, adding that projects are now being priced at viable levels due to an increasing awareness — among contractors and sub-contractors — of the true cost of carrying out work.

“The upward movement in prices reflects the current modest upturn in construction activity, albeit from a very low base. Tender prices have now risen by over 8% since they bottomed out at the end of 2010/start of 2011 and it is anticipated that this trend will continue, and possibly accelerate during 2014,” he added.

Welcoming the Government’s plans to boost the supply of new homes and create 60,000 construction-related jobs, in the process, Mr O’Connor said the key, now, is to implement such plans and build the sector up to the requisite size.

“Construction output in 2018 is still expected to be below 2009’s output and is a long way short of the optimum level of 12% of GNP, which is seen as the European norm. Currently we are around 6%,” said Mr O’Connor

“We need sustainable jobs and we need to build up our supply of skilled workers, which has become seriously depleted in recent years. If we can create those sustainable jobs it will make a huge contribution to the general economy.”