The Society of Chartered Surveyors Ireland 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 increased by 1.8% in the second half of 2012 and 2.8% for the year as a whole.
Andrew Nugent, Chair of the Quantity Surveying Professional Group of the Society of Chartered Surveyors Ireland said: “We are now seeing a slow recovery in construction tender prices, which have risen by almost 5 per cent over past two years and which is primarily due to rising input costs such as building materials and energy costs.
“The gradual increase in tender prices also reflects a growing reality in the industry that recent trends in below cost tendering are unsustainable, as witnessed by the number of company and project failure amongst contractors and sub-contractors,” he said.
Mr Nugent said that although tender prices are now slightly more realistic, particularly in the specialist building services area, there remains a severe shortage of work within both the public and private sectors and tenders are likely to remain competitive for the foreseeable future.
The SCSI also welcomed the recent Government Action Plan for Jobs initiative and highlighted the important role for the construction sector in supporting the implementation of the Action Plan.
“Historically, the focus of the construction sector has been on building houses and apartments. However, the industry focus must evolve to meet the changing needs of the Irish economy. It has a very important role to play in supporting Ireland’s Smart Economy and Foreign Direct Investment focus through the development, planning, costing and construction of new ICT facilities, data centres, suitable office space for multinationals, health infrastructure and other employment generating projects,” concluded Nugent.