State urged to start building before Trump tariffs raise costs

Global volatility could send costs rising again, warns Society of Chartered Surveyors Ireland president

The Macroom Bypass completed in 2023. The SCSI said moderate inlfation presents an opportunity to accelerate the much-needed investment in public infrastructure.

The Government has been urged to avail of “moderate” commercial construction costs to invest in public infrastructure, with fears that US tariffs could send future prices spiralling.

A new report by the Society of Chartered Surveyors Ireland (SCSI) shows that commercial construction costs have stabilised considerably in the past two years. Commercial cost inflation increased by1.5% in the second half of 2024.

According to the SCSI’s Tender Price Index (TPI), the annual median national rate of inflation for 2024 was 3% — down from the 3.9% recorded for 2023, while in 2022 it was as high as 11.5%.

The society’s president, Kevin Hollingsworth, said the State should grasp the opportunity to invest while price inflation remains steady, with global forces threatening future stability.

“In terms of the formation of a new Government and the programme for Government, the return to more sustainable levels of inflation presents an opportunity to accelerate the much-needed investment in public infrastructure in areas such as utilities, transportation, and healthcare,” he said.

Mr Hollingsworth said the reduction in the rate of inflation in the sector is largely due to continuing competitiveness in the commercial construction market and reduced-price volatility for construction materials, but warned that external factors meant the outlook could change quickly.

“Surveyors indicated that they anticipate tender prices, labour, and materials will continue to increase in the first half of 2025 but, due to the global volatility and the open nature of the economy, they said it was very difficult to predict if the more moderate rates we have seen over the last year-and-a-half would continue.”

The impact of the US presidency of Donald Trump is likely to have a huge influence on future stability, with Mr Trump already threatening a series of tariffs with trading partners which would likely hike capital costs.

“Many members also raised concerns over the introduction of tariffs on goods and services to the US, in terms of the potential impact it may have on the wider economy and in turn on capital investment,” Mr Hollingsworth said.

The Tender Price Index is based predominately on new build commercial projects with values in excess of €500,000 and covers all regions of Ireland.

The index is the only independent assessment of commercial construction tender price.

The research is based on responses from chartered quantity surveyors from all around the country, working on a variety of commercial projects, and was conducted in January 2025.

The report indicates some regional variation over the last six months with the highest median rate of inflation of 2% recorded in Connacht/Ulster.

In Munster, the figure was 1.5%. In Leinster and Dublin, the increase was 1%.

That 1% figure was also Dublin’s annual median tender price change as it recorded 0% price change in the first half of 2024.

Munster has the highest annual increase at 4%, with Connacht / Ulster on 3.5% and Leinster (excluding Dublin) on 2.5%.