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Index shows small rise in building costs

Tuesday, September 25 14:26:23

There was a slight increase of 1pc from the second half of this year in construction costs as prices begin to inch back up from a 33pc drop from the peak of the boom in 2007.

That's according to the latest Buildcost Construction Cost Guide from the society of Chartered Surveyors, which said that the below-cost tendering that was a feature following the construction bust is now at an end.

It said that the stabilising of tender rates in the First Half of 2012 are due to a number of factors. International demand for materials such as steel, metal etc., rising fuel prices, shortage of contractors and sub contractors have led to material price increases that can no longer be absorbed within tender rates.

"The latest announcement from the Government plan to invest E2.25 Billion in roads, schools and health. While this is welcome news for a struggling Construction Industry, there remains serious questions as to how these projects will be funded. It is likely that the majority of the finance will come from the private sector through Public Private Partnerships and other private investment vehicles," it said.

It said that lack of available finance coupled with poor values will contribute to construction activity remaining poor for the short to medium term.

"While this status quo remains, tender rates will continue to remain very competitive."