Soaring building material costs threaten economic growth, report warns

0

Rises of nearly 35% in the price of some building materials pose a threat to Irish growth, a new survey warned on Monday.

Covid-19 remains a lingering problem for Irish construction, but rising costs are among several factors hampering industry growth, according to project managers Turner & Townsend.

The company’s latest market intelligence survey indicates that prices for rebar, structural steel, aluminum curtain walls/panels and copper all posted strong increases in the first half. of this year.

The price increases range “from 34.2% for rebar to 7.5% for copper,” according to the report.

Turner & Townsend’s assessment follows ongoing complaints from builders and their suppliers that prices for key materials are rising across the board.

Local wood shortages, combined with manufacturing disruptions caused by Covid-19 and extreme weather, have driven some costs up to 60%.

This month, insulation maker Kingspan, building materials giant CRH and DIY chain owner Woodie’s and builders trader Grafton Group, all pointed to rising raw material costs in their results. intermediaries.

Mark Kelly, Managing Director of Turner & Townsend in the Republic, said: “Rising construction costs, supply chain disruption and skilled labor shortages are fast becoming major barriers to growth. Of the industry”.

Labor costs

Builders estimate labor costs will rise 4.4% and material prices will rise 6.8% over the next 12 months, according to the company.

Contractors surveyed by Turner & Townsend predicted that tender prices could increase by 8.9% in 2021, 3.5% next year and 1.6% in 2023.

“Overall average material costs for projects would have increased by 13.4%, while the average labor cost would have increased by 4% in the last 12 months to July 2021,” says the report. business study.

Turner & Townsend warns that it is difficult to predict how these challenges will evolve.

“We hope that some of the adverse effects of these issues on the industry will lessen somewhat over the next six to 12 months,” its report said.

The company adds that it is important to note that builders’ sentiments reflect what happened during a period when construction had only just reopened after a government lockdown.

The report adds that the industry faced a “myriad” of challenges that affected it disproportionately and negatively at the time.

Share.

Comments are closed.