Dublin has been ranked as the sixth most expensive place in the world to build, according to the International Construction Market Survey 2018 completed by Turner & Townsend.

The survey analyses input costs – such as labour and materials – and charts the average construction cost per m² for commercial and residential projects in 46 markets around the world.

According to the figures, the cost of building in Dublin is expected to increase by seven percent this year as new projects are driving demand for resources and labour. Globally, construction cost inflation is expected to hit 4.3 percent this year.

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46 percent of markets surveyed within the Turner & Townsend's Survey are shown to be heating up on the back of global economic growth, compared to 33 percent in 2017.

Mark Kelly, Managing Director for Ireland at Turner & Townsend said managing cost inflation would rely on addressing skills shortages: "Strong GDP growth supported by increasing domestic demand for new development has driven a surge in construction activity in Dublin which puts pressure on prices. With major commercial projects underway, including for the €700m national children's hospital, the €200m+ Grangegorman campus PPP project and the €225 million Capital Docks scheme, this trend looks set to continue for the foreseeable future.

"Natural cost inflation is being exacerbated by skills shortages. We need to look at how we incentivise investment in new methods of construction, including automation and offsite manufacture so that we can both supplement a diminishing onsite workforce and attract the new talent and skills that we need to modernise the sector."

(CM)