Surveyors say tender prices rose by over 3% in 2013
The latest Tender Price Index published by the Society of Chartered Surveyors Ireland shows that construction tender prices increased through 2013 and are likely to continue to increase moderately 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 construction tender prices grew by 2.2% in the second half of 2013, up from 0.9% in the first half of the year.
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The annual increase for 2013 is 3.1%.
Micheál O’Connor, President of the Society of Chartered Surveyors Ireland said “The upward movement in prices reflects the current modest upturn in construction activity, albeit from a very low base. Tender prices have now risen by over 8% since they bottomed out at the end of 2010 / start of 2011 and it is anticipated that this trend will continue and possibly accelerate during 2014”.
The SCSI said that there is an increasing awareness amongst contractors and sub-contractors of the true cost of carrying out work and a reluctance to price below this, which ensures that projects are priced at viable levels.
“Despite these recent modest increases building prices remain very competitive and, at 28% below their peak in 2007, they are still some way below prices back in 2000 which means that planned Government expenditure on construction and infrastructure projects remain at very competitive prices” Mr O’Connor said.
Future
Mr O’Connor also welcomed recent Government plans aimed at boosting the supply of new homes and creating up to 60,000 jobs in the construction sector.
“We have had several reports in recent times so everyone is aware of the scale of the challenge facing us. The key element now is implementing these plans and building up the construction sector to the requisite size. Construction output in 2018 is still expected to be below 2009’s output and is a long way short of the optimum level of 12% of GNP which is seen as the European norm. Currently we are around 6%
“We need sustainable jobs and we need to build up our supply of skilled workers which has become seriously depleted in recent years. If we can create those sustainable jobs it will make a huge contribution to the general economy. For every 10 direct construction jobs created, a further 4 are created in the wider economy so the knock on effect of job creation in the construction sector should not be understated” Mr O’Connor concluded.
The Index numbers since 1998 are as follows:
First Half 1998
100.0
Second Half 2004
139.4
First Half 2011
101.5
Second Half 1998
103.8
First Half 2005
142.6
Second Half 2011
103.5
First Half 1999
108.6
Second Half 2005
144.7
First Half 2012
104.5
Second Half 1999
116.1
First Half 2006
146.7
Second Half 2012
106.4
First Half 2000
121.7
Second Half 2006
151.7
First Half 2013
107.3
Second Half 2000
130.7
First Half 2007
152.0
Second Half 2013
109.7
First Half 2001
132.2
Second Half 2007
145.2
Second Half 2001
136.9
First Half 2008
140.7
First Half 2002
133.9
Second Half 2008
130.0
Second Half 2002
130.1
First Half 2009
116.4
First Half 2003
127.2
Second Half 2009
107.7
Second Half 2003
129.3
First Half 2010
103.7
First Half 2004
135.3
Second Half 2010
101.5