Prices for commercial building have increased by 7.5% during the first six months of 2022, according to the latest Tender Price Index published by the Society of Chartered Surveyors Ireland (SCSI).
This is the highest six-month increase in prices recorded by the SCSI since price tracking of commercial construction inflation figures began in 1998.
The index shows that building costs are rising at a faster level than the price increases that were recorded during the Celtic Tiger period, up from 7.4% recorded in the six-month period between July and December 2000.
The national annual rate of construction price inflation is now standing at 14%, up from 13.4% in the previous report from the SCSI.
The costs of construction have risen sharply in the last six months, with prices up from a rise of 6% in the second half of 2021.
According to the organisation disruption caused by Covid-19 restrictions, supply chain issues and Russia’s invasion of Ukraine has all contributed to soaring costs over the past 18 months.
The index also demonstrates that there is little price variation across Ireland with the rate of inflation for Dublin standing at 7%, and in the rest of the country inflation was recorded at 8%.
Kevin Brady, chair of the quantity surveying professional group, SCSI said: “During the last six months we’ve recorded the highest ever rate of construction inflation increase since we began tracking it 24 years ago. This is largely due to the impact of the war in Ukraine, which is causing high energy prices and exacerbating the inflationary pressures on construction materials.”
“In addition to these external issues, high demand over the last year and a half has been compounded by severe labour shortages and rising labour costs.
“As the sector struggled to deal with this series of unprecedented events, construction inflation has risen by a record 22% over the last 18 months,” Mr Brady added.
