National annual rate of commercial construction inflation is now running at 3% – down from 6.2% this time last year
In Dublin there was no new increase recorded in last six months
Chartered Surveyors attribute fall to reduced price volatility for construction materials
Friday July 26th 2024: A new report by the Society of Chartered Surveyors Ireland (SCSI) shows that while commercial construction costs are continuing to rise, the rate of increase has levelled off in the first half of 2024. The latest Tender Price Index (TPI) published by the SCSI shows the rate of commercial construction inflation increased nationally by 1.5% in the first six months of 2024, the same rate as the preceding six months.
According to the SCSI’s Tender Price Index, (TPI) which is the only independent assessment of commercial construction tender prices in Ireland, the annual median national rate of inflation for the year to date (July ’23 to June ’24) was 3%, more than half the rate of 6.2% which was recorded for the previous 12 months (July ’22 to June ’23).
The report indicates significant variation across the regions over the last six months with the highest median rate of inflation of 2.5% recorded in Munster while Dublin recorded no additional increase in this period on the 1.5% increase recorded in the previous six months. Leinster (excluding Dublin) and Connacht / Ulster both recorded a 1.5% increase down from 2.2% and 2% respectively.
Donal Hennessy, Chair of the SCSI’s Quantity Surveying Professional Group said the fact that the rate of inflation had remained at 1.5% for two consecutive six-month periods was a welcome development.
“These figures illustrate the dramatic change we have experienced with regard to commercial construction inflation over the last two years. In the first six months of 2022 inflation reached a record high of 7.5%, while the annual rate of inflation hit 14%. The respective figures now are 1.5% and 3%.”
“The reduction in the rate of increase is due in the main to a more competitive commercial construction market and reduced-price volatility for construction materials. Three out of four respondents believe tender prices will continue to increase in the second half of the year while a fifth anticipate prices will remain the same. Surveyors believe the main issues which will impact the market are the introduction of government levies on construction and demolition waste disposal, labour costs and high fuel costs.”
The President of the SCSI, Kevin Hollingsworth, said: “The gradual return to modest tender price inflation rates over the last three six-monthly reporting cycles has been a positive development and if it can be maintained will be important in helping improve the competitiveness of the commercial construction sector.”
The full Tender Price Index report is available at https://scsi.ie
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