Inflation in building costs to continue - survey

More than four out of every five builders across the country expect the prices they charge for projects will rise in the first three months of the year when compared to the same period last year, a new survey of the industry has revealed.

99% reported a year-on-year increase in the cost of raw materials, and nearly all expect that trend to continue.

The quarterly survey of members of the Construction Industry Federation (CIF) found evidence of a strong recovery in the sector, with 50% of respondents reporting increased turnover in the third quarter of the last year compared to the same period in 2020.

A similar proportion also expect their fourth quarter revenues to be higher, although mid-sized businesses tended to be less optimistic about growth.

"It's a great regret that we were shut down unnecessarily at the start of the year," said Tom Parlon, Director General of the CIF.

"However, our companies are robustly recovering and delivering on the housing and infrastructure that will help Ireland progress socially and economically in the coming decade."

But the firms also outlined a raft of challenges facing the sector, with three quarters saying they are experiencing problems accessing skilled labour.

Holding onto staff is also a problem for four in every ten building businesses, the survey found.

Access to raw materials was also cited as a difficulty by one in every two respondents, due to supply chain disruption.

83% said there had been a year-on-year increase in the cost of labour in the last quarter, with a similar proportion expecting that trend to continue.

"These issues are in many ways out of our hands and those of Government," said Mr Parlon.

"Where the Government can make a difference is by reducing the cost of engagement with the State when it comes to building.

"We are hearing about reviews of the planning system and procurement practices in Government for nearly a decade now with very little progress.

"The reality is that the Government is not an efficient customer and thankfully they are attempting to address these issues, but progress is glacial."

Employment growth is strong in the sector however, with 46% reporting the total number of people employed by their firm is higher than it was a year ago and a similar proportion predicting employment levels would increase in the first quarter.

While 52% of companies reported a year-on-year increase in total revenue generated by new orders, with 56% anticipating year on year growth in the last three months of last year.

Perhaps surprisingly, just 5% said maintaining a Covid-free workplace was a key challenge.

The research was carried out by Accuracy Market Research between the end of October and the end of November last year and included 303 companies who are member of the CIF.

Qualitative focus group research was also done conducted with industry leaders around the survey results.

Source : RTE  17/01/2022