June has shown a significant increase in construction materials with an overall increase of 12%. In some instances, for example steel based materials, we have seen an increase of as much as 44%!
In May, we saw significant press coverage on the impact price increases like this will have on construction costs, and for new homes, housebuilders have estimated the cost of a new home could jump between €12,000 and €15,000 by the end of the year.
Unless there is a strategy for change, price increases will continue to rise, potentially forcing the construction sector into a market where price wars could result in specification of poor quality materials or in forcing consultants and sub-consultants into a situation where margins are hit, consequently more insolvencies.
In construction, where net margins can be a real challenge, affordability is dependent on the availability of resources and the size and scale of our supply chain.
“The covid-19 pancemic and the fall out of Brexit is driving the costs, and whilst new port regulations will be causing some increases, it really is a supply and demand issue”. Joe McCaffrey, Managing Director, Duke McCaffrey said. “Looking further afield, investing in Ireland’s own production and in our talent is an urgent requirement”