Rising Inflation Adds €10k to Building Costs

Recent Central Statistics Office (CSO) data suggest construction costs have soared, impacting the viability of building projects in Ireland

Rising inflation is causing concern for small building contractors and trade professionals, with construction material costs on the rise.

Recent statistics from the Central Statistics Office (CSO) suggest that basic materials like plaster, concrete, and blocks/bricks have seen significant price hikes. This price rise, along with builders' wages, has resulted in an average increase of 7.7% across the board, adding an extra €10,350 to the cost of building a typical three-bedroom semi-detached home. In Dublin suburbs, these costs could soar to €200,000, with an additional €15,400 in expenses.

While inflation has somewhat slowed down, it remains higher than before. The upsurge in wholesale prices for construction materials has impacted the viability of building projects, making government interventions vital to support homebuilders.

To help alleviate the pressures of rising construction costs, the government has abolished development levies for a year and plans to refund gas, water, and electricity connection expenses, amounting to approximately €7,000 per home. These measures are designed to support builders and maintain a consistent supply of housing.

Small and medium-sized builders, as well as self-builders, are most affected by inflation as they might not have the capacity to plan production and pre-order materials. To reduce materials costs, they need to secure competitive rates through active price comparison and negotiation. Furthermore, small building contractors are required to manage their costs effectively to avoid passing them on to their customers.

Read Surviving Inflation: Tips for Builders & Tradesmen to Tackle Shrinking Client Budgets.

Trade professionals can take proactive steps to manage rising inflation challenges by reviewing supplier contracts, diversifying materials sources, and carefully analysing pricing. Opting for smaller jobs or diversifying their services can also help them fill scheduling gaps, expand their customer base, and increase their profits.

In conclusion, small building contractors and trade professionals must proactively address inflation's impact on their projects. The government has provided several initiatives to help, including abolishing development levies and refunding utility expenses. By adapting their strategies and considering online platforms like onlinetradesmen to fill scheduling gaps and secure skilled labour, these measures can help ensure the continued success and growth of their projects.

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