11 February 2015
Construction Tender Prices increase by 5% during 2014
Shortage of specialist contractors leading to higher prices
Wednesday 11th Feb 2014. The latest Construction Tender Price Index published by the Society of Chartered Surveyors Ireland (SCSI) shows that tender prices increased by 5% in 2014.
The SCSI Construction Tender Price Index, which has been running since 1998 and is the only independent assessment of construction tender prices in Ireland shows that prices increased by 2.9% in the second half of 2014. The annual increase for 2014 was 5.0%.
Micheal Mahon, Vice Chairman of the Quantity Surveying Professional Group of the SCSI said; “Construction tender prices have continued to increase steadily since bottoming out in second half of 2010/first half 2011, and the rate of increase accelerated slightly during 2014. This trend is likely to continue during 2015 as activity in the industry picks up following the upturn in property transactions in recent years.”
“The increase in construction tender prices is most apparent in the Greater Dublin area but is likely to spread out from the capital during this year. As construction activity picks up it is becoming apparent that there may be a shortage of certain specialist sub-contractors in the near future. This is already beginning to manifest itself with glazing and curtain walling contractors”, he said.
“Rising prices and a potential shortage of key trades mean that it is important that clients who are embarking on building projects of any significant duration should take professional advice from a Chartered Quantity Surveyor as to the appropriate provisions to make for pricing future risk items” concluded Mr Mahon.
Tender prices peaked in the first half of 2007 and fell rapidly for the following four years before levelling off in the second half of 2010/first half 2011. At that point prices were down 33% from peak and the Society warned that the trend of below cost tendering was simply not sustainable. Over the last three years prices have risen at a steady pace but are still at 1999 levels.
Notes for Editor
The Index is the only independent assessment of construction tender prices in Ireland It is compiled by the Quantity Surveying members of the Society based on actual tender returns for non-residential projects during the period in question. It is based on predominately new build projects with values in excess of € 0.5m and covers all regions of Ireland. The Index is therefore a measure of average price increases across differing project types and locations. It should be regarded as a guide only when looking at any specific project, as the pricing of individual projects will vary depending on such factors as their complexity, location, timescale, etc The SCSI Tender Price Index will continue to monitor construction tender levels and trends and will publish the results for the first half of 2015 in the Summer.
The Index numbers since 1998 are as follows: