Belfast Telegraph

Ireland's building costs reaching Celtic Tiger peak

By Donal O'Donovan

Construction costs in the Republic will surpass 2006 levels this year and are rapidly approaching the highest levels of the Celtic Tiger bubble, according to the Society of Chartered Surveyors Ireland (SCSI).

The higher prices are expected to have implications for a series of large infrastructure projects. Higher wages, plus steel and timber costs, are driving up the price contractors are seeking to pitch for projects, the SCSI found.

The higher wages in the Republic have also proved problematic for the Northern Ireland construction sector, with many firms finding workers lured to Dublin.

Des O'Broin, president of the SCSI, described the increases as concerning in the shorter term and a challenge for those involved in procurement, especially public procurement which is a fixed price tender process.

"The current rate of increase is simply not sustainable in the long term," Mr O'Broin warned.

"The major reason cited by SCSI members for the increase in tender prices is ever increasing workload coupled with the skills shortage being experienced by both main contractors and specialist sub-contractors."

Drivers of higher costs include amendments to building regulations and the impact of Sectoral Employment Orders (SEOs), which replaced the previous registered employment agreements in the construction industry last year, and set out minimum terms for pay, pensions and other benefits.

Belfast Telegraph

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