Iran war pushing costs for commercial construction tenders higher

Rate of cost increase highest in Munster, says SCSI's Tender Price Index

Society of Chartered Surveyors Ireland president Tomás Kelly. Picture: Conor McCabe

Tender prices in commercial construction are rising at their highest levels in almost four years, driven by the ongoing conflict in the Middle East, a report published on Tuesday said.

Construction tender prices increased by just 1% in the second half of 2025. But the latest Tender Price Index (TPI) published by the Society of Chartered Surveyors Ireland (SCSI) shows the rate of commercial construction inflation increased nationally by 3% in the first half of 2026, a trebling of the 1% rate of increase recorded in the previous six months.

The report indicates significant price variation across Ireland in the first half of the year, with the highest rate of 3.3% being recorded in Munster, following on from the 1.5% increase in the second half of 2025.

SCSI president Tomás Kelly said the key drivers of the latest tender price inflation figures are the conflict in the Middle East and increases in the price of specific building products.

“The majority of chartered quantity surveyors surveyed pointed to the Middle East conflict as a major driver of material price changes, with the impact expected to particularly influence the price of oil-based materials. Others highlighted the fact that the Middle East conflict would have a direct impact on supply chains,” said Mr Kelly.

“The latest CSO figures tracking material price changes show that copper, up 8.7%, pipes and fittings, up 7.9% and PVC pipes, up 5.4% are among the highest inflated materials over the past 12 months. This coincides with the views of quantity surveyors who are also highlighting upwards pressure on material prices.” 

Mr Kelly said the relationship between the demand and supply of labour was reflected strongly in the report's findings. Availability of skilled labour is in short supply which was likely putting upward pressure on tender prices. “Chartered Quantity Surveyors have also noted the implementation of the Sectoral Employment Order (SEO), which will increase the wages of construction workers in Ireland from this month," said Mr Kelly. 

Approximately 84% of chartered quantity surveyors in the report said the market in an upswing or at the peak with the remaining 15% placing the market in a downward phase. Material price instability was one of the strongest sentiments expressed by chartered quantity surveyors when asked about the drivers of tender price movement over the next six months. 

"The hope would be that that price instability, caused by geopolitical uncertainty will soon end," said Mr Kelly. "This suggests that, for many projects, the issue is not simply whether the price of materials is rising, but the extent to which contractors can confidently price materials over the life of a tender and construction programme. For now, it’s clear that ongoing uncertainty is a factor in the increasing trend in tender prices."

The Tender Price Index is based on sentiment returns provided to chartered quantity surveyor members of the SCSI, and covers commercial projects during the first half of 2026. It is based predominantly on new build projects with values in excess of €1m and covers all regions of Ireland.