A new report reveals that commercial construction costs continue to rise, but the rate of increase has remained stable over the last 18 months.
The figures from the Society of Chartered Surveyors Ireland (SCSI) show that the rate of commercial construction inflation increased nationally by 1.5% in the second half of 2024, the same rate as the two previous six-month periods.
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 2024 was 3%, down from the 3.9% recorded for 2023 and the 11.5% recorded for 2022.
The report indicates some variation across the regions over the last six months.
The highest median rate of inflation of 2% was recorded in Connacht / Ulster, in Munster the figure was 1.5%, while in Leinster and Dublin the increase was 1%.
“These figures illustrate the dramatic changes we have experienced with commercial construction inflation over the last three years,” said Kevin Hollingsworth, President of the SCSI.
“In the first six months of 2022 inflation reached a record high of 7.5%, while the annual rate of inflation that year was 11.5%. The respective figures now are 1.5% and 3%, which is a welcome improvement,” he added.
Mr Hollingsworth said the reduction in the rate of increase is mainly due to the continuing competitive commercial construction market and reduced-price volatility for construction materials.
“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,” he said.
“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 State should take advantage of the more stable tender price environment.
“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.
