June has seen a continued hike in the cost of construction materials, with an average increase of 12% to date. This two-digit climb is significant – and worrying in itself – but the detail is even more dramatic. Steel-related products, for example, have soared by up to 44%.
There has already been plentiful press coverage of these rapid rises and the prospect of a new home jumping in cost by between €12,000 and €15,000 by the end of the year is rightly headline grabbing.
However, unless there is a strategy for change, the consequences are likely to be far more severe. Left unchecked, prices will continue to rise, fuelling the potential for price wars within the construction sector that could lead to a proliferation in use of sub-standard building materials and business insolvencies.
Key to addressing the affordability of current and planned projects is ensuring the availability of resources and steadying the supply chain, according to Joe McCaffrey, Managing Director of Duke McCaffrey.
“The Covid-19 pandemic, fallout of Brexit and new port regulations are driving the inflation and construction is having to deal with a major supply and demand issue,” he said. “Investing in Ireland’s own production and talent is an urgent requirement and will help to stop the spiralling of costs.”