Commercial construction tender prices increased by 1.5% in the second half of 2024

 

A new report by the Society of Chartered Surveyors Ireland (SCSI) shows that while commercial construction costs are continuing to rise, the rate of increase has remained relatively stable over the last 18 months. The latest Tender Price Index (TPI) published by the SCSI shows the rate of commercial construction inflation increased nationally by 1.5% in the second half of 2024, the same rate as the two preceding six-month periods.

According to the SCSI’s Tender Price Index, (TPI) which is the only independent assessment of commercial construction tender prices in Ireland, the annual median national rate of inflation for 2024 was 3%, down from the 3.9% recorded for 2023 and the 11.5% recorded for 2022.

The report indicates some variation across the regions over the last six months, with the highest median rate of inflation of 2% recorded in Connacht/Ulster, in Munster the figure was 1.5% while in Leinster and Dublin the increase was 1%. That 1% figure was also Dublin’s annual median Tender Price change as it recorded 0% price change in the first half of 2024. Munster has the highest annual increase at 4%, with Connacht/Ulster on 3.5% and Leinster (excl Dublin) on 2.5%.

The President of the SCSI, Kevin Hollingsworth, said that following significant turbulence in the market over the last few years, price inflation has returned to a steadier pattern.

“These figures illustrate the dramatic changes we have experienced with commercial construction inflation over the last three years. In the first six months of 2022 inflation reached a record high of 7.5%, while the annual rate of inflation that year was 11.5%. The respective figures now are 1.5% and 3%, which is a welcome improvement.

“The reduction in the rate of increase is due in the main to the continuing competitive commercial construction market and reduced-price volatility for construction materials. Surveyors indicated that they anticipate tender prices, labour and materials will continue to increase in the first half of 2025 but due to the global volatility and the open nature of the economy, they said it was very difficult to predict if the more moderate rates we have seen over the last year and a half would continue.”

“Many members also raised concerns over the introduction of tariffs on goods and services to the US, in terms of the potential impact it may have on the wider economy and in turn on capital investment.”

Hollingsworth said the State should take advantage of the more stable tender price environment. “In terms of the formation of a new government and the Programme for Government, the return to more sustainable levels of inflation presents an opportunity to accelerate the much-needed investment in public infrastructure in areas such as utilities, transportation and healthcare.”

Tender Price changes – Dublin and the regions

Dublin
The median change in tender prices for the second half of 2024 was 1%. This is greater than the 0% median change reported for the first half of 2024. The annual median tender price change for Dublin in 2024 was 1.0%.

Leinster excl. Dublin
The median change in tender prices for the second half of 2024 shows an increase of 1.0%. This is lower than the 1.5% increase reported for the first half of 2024. The annual change for the Leinster (excluding Dublin) region in 2024 was 2.5%.

Munster
The median change in tender prices for the second half of 2024 shows an increase of 1.5%. This is lower than the 2.5% increase reported in the first half of 2024. The annual change for the Munster region in 2024 was 4.0%.

Connacht/Ulster
The median change in tender prices for the second half of 2024 shows an increase of 2.0%. This is higher than the 1.5% increase reported for the first half of 2024. The annual change for the Connacht/Ulster region in 2024 was 3.5%.

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Michael McDonnell Managing Editor of Irish Construction Industry Magazine & Plan Magazine

Email: michael@irishconstruction.com      WWW.MCDMEDIA.IE