Global shortages of almost all building materials have pushed up raw material costs for Irish construction by 13.4% and labor costs by 4%, with further price increases to come , warned a major investigation.
The Turner & Townsend investigation also found that Covid-19 restrictions will last a long time for construction in the Republic and that the industry will face challenges for some time.
“The contractors we interviewed reported price increases for some materials that were much higher than expected increases,” he said.
“In particular, rebar, structural steel, aluminum curtain walls and copper all saw substantial increases, ranging from 34.3% for rebar to 7.5% for copper “, according to the report.
“There are many reasons for these increases, including increased shipping costs, plant closures due to Covid-19, increases in iron ore and oil prices and a general shortage of some materials due to high demand from China and pre-sale of stock materials, ”It said.
However, the report says there is hope that the pressures will ease and “while extremely difficult for customers and contractors alike, we expect many of these supply issues to be resolved. in the next six to 12 months “.
On the outlook, the report predicts that tender price inflation of nearly 9% this year will slow to 3.5% in 2022 and 1.6% in 2023.
“Tender market conditions are heating up, with 50% of those surveyed considering the market to be hot, hot or overheating,” he said.
He said labor costs have increased in many trades over the past 12 months. The costs of tilers and plasterers increased 4.7% and the costs of carpentry, masons, plumbers and electricians also increased 4.7%.
General labor costs rose only 0.3%. Many labor costs are also expected to increase over the next 12 months, according to the survey.
“There are a lot of other Covid-related issues that also negatively affected buildings and construction production during this period; these include productivity level issues, increased lead-in times, and run times. program increased, ”said the Turner & Townsend report.