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New figures from the Society of Chartered Surveyors Ireland (SCSI) show that building costs increased slightly in the first half of 2013, continuing a trend of moderate price increases dating from the start of 2011 when prices first began to level off.
The SCSI Tender Price Index shows that construction tender prices increased by 0.9pc since the end of last year and were up 2.7pc for the full year from the first half of 2012.
“The slow upward movement in prices in the first half of the year is due to increases in building materials and input costs internationally,” said Paul Dunne, chair of the quantity surveying professional group of the SCSI.
“The moderate rise also reflects an increasing awareness of the unsustainability of below cost tendering, which is a practice whereby contractors submit bids at unsustainable levels to secure the work and has unfortunately resulted in the failure of so many contractors, sub-contractors and suppliers working on public and private projects.”
The SCSI Tender Price Index reports that since construction tender prices bottomed out at the end of 2010 and beginning of 2011, construction prices have risen by between 2.5 and 3pc per year and this trend looks as though it is set to continue.
“Despite modest increases, current prices are still 40pc below their peak level reached in 2007 and are still only at levels last seen in 1999,” noted Dunne.
Tenders are likely to remain competitive for the foreseeable future as a shortage of work continues in both the public and private sectors, he added, but he welcomed the recent publication of the Forfas strategic report on the construction industry and called for the immediate implementation of its recommendations.
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