Irish construction materials and labour costs 'climb amid global shortages'

"In particular, reinforcing bars, structural steel, aluminium curtain walling-panelling and copper have all seen substantial increases, ranging from 34.3% for reinforcing bars to 7.5% for copper," according to the report.  
Irish construction materials and labour costs 'climb amid global shortages'

Labour shortages long plagued the construction industry and now materials are rising too. File picture. 

Global shortages of almost every building material have driven raw material costs for Irish construction up by 13.4% and labour costs by 4%, with more price increases to come, a major survey has warned. 

The Turner & Townsend survey also found that the Covid-19 restrictions will be long lasting for construction in the Republic and the industry will face challenges for some time to come.                      

"The contractors we surveyed have reported price increases in certain materials well in excess of anticipated increases," it said. 

"In particular, reinforcing bars, structural steel, aluminium curtain walling-panelling and copper have all seen substantial increases, ranging from 34.3% for reinforcing bars to 7.5% for copper," according to the report.  

"There are numerous reasons for these increases, including increased shipping costs, factory closures due to Covid-19, iron ore and oil price increases and a general shortage of certain materials due to high demand from China and pre-selling of stock materials," it said. 

Overall, average material costs for projects are reported to have increased by 13.4%. 

However, the report said that there is hope for the pressures to ease and "although extremely challenging for clients and contractors alike we expect many of these supply issues to be resolved in the next six to 12 months".

On the outlook, the report predicts that tender price inflation of almost 9% this year will slow to 3.5% in 2022 and to 1.6% in 2023.

"The tendering market conditions are getting warmer, with 50% of respondents considering the market to be warm, hot, or over-heating," it said.   

It said that labour costs have increased across many trades in the past 12 months. Tiler and plasterer costs have risen 4.7% and carpentry, bricklayer, plumber and electrician costs have also risen by 4.7%.

General labourer costs have increased by only 0.3%. Many labour costs are also expected to increase in the coming 12 months, the survey found.    

"There are plenty of other Covid-related issues which have also adversely affected building and construction output during that time; these include productivity level issues, increased lead-in times and increased programme durations," the report by Turner & Townsend said. 

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