Building costs increase with level of activity

2017 tender and building costs are poised to grow at a faster rate than in 2016.

The Society of Chartered Surveyors Ireland released their PwC Construction Survey Report 2017 this week, showing that their Tender Price Index increased 6 per cent over the course of 2016. “If price inflation continues to grow at the current level, it is anticipated that pricing levels will return to the levels last seen in 2006 and 2007 in the next few years,” commented the authors. The vast majority of respondents (90 per cent) expected an uptake in residential construction activity in 2017. The good news for self-builders is that despite the increase in tender costs, the cost of building has only increased marginally over the same period. The House construction cost index, which monitors only labour costs and the cost of building materials but not profits or overheads, increased by 0.60 per cent from 2015 to 2016. This level of growth has however already been exceeded between January and March of this year. In NI the situation is the reverse of ROI’s; the latest Ulster Bank PMI indicator shows that construction firms in NI have seen a growth in activity, an increase in prices they charge, but overall a much greater increase in their input costs. The Royal Institute of the Architects of Ireland’s 2016 construction costs document shows self-builds — new homes and renovations — costing in the region of €1,500 to €1,900 per sqm for an average specification in ROI.