Figures from the Society of Chartered Surveyors Ireland indicate that building costs have bottomed out and even increased slightly in the second half of 2011.
The SCSI Tender Price Index, which has been running since 1998, shows that prices stabilised in the first half of 2011 and increased by 2% in the second half of the year.
Andrew Nugent, chairman of the SCSI’s Quantity Surveying Professional Group, said construction tender prices had fallen by around a third since their peak in the first half of 2007. He said prices were now still only at a level last seen 13 years ago in 1998.
“The stabilisation and slight increase in tender prices in 2011 reflects the severe shortage of new construction projects and reduction in the available pool of contractors,” he said. Mr Nugent said this was due to company failures and a move by some firms to concentrate their efforts on overseas markets.
He said that while there was more “realism” about prices for construction projects recently, there was still a severe shortage of work in all construction sectors. Mr Nugent said tenders were likely to remain “very competitive” for the foreseeable future.
The SCSI also called on the government to consider the appointment of a chief construction adviser, similar to the UK, to bring a centralised approach and a cost savings strategy to a previously fragmented public sector procurement process.