New figures have revealed how construction costs are rapidly approaching those seen close to the peak reached in 2007.

The Society of Chartered Surveyors Ireland's (SCSI) latest Tender Price Index reveals industry tender prices rose by 3.95% during the first six months of this year, with further predictions estimating a 7.4% increased for the second half of 2018.

SCSI said: "The indices represent a national average; however, the rate of increase is not uniform across the country. For the first half of 2018, Dublin and the rest of Leinster increased by more than the national average, rising by 4.2% and 5.1% respectively. Prices in Munster and in Connacht/Ulster rose also but by less than the national average, increasing by 3.38% and 3.12% respectively."

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Continuing, SCSI said its members cited increasing workloads coupled with the skills shortage as the major reason for the continuing increase in tender prices.

"Labour prices are also rising on foot of the Sectoral Employment Order while the price of steel, timber and other materials, as well as oil, are also increasing," the organisation stated.

"Other factors contributing to the increase include the new NZEB regulations and uncertainty around Brexit and tariffs arising from a global trade war."

Des O'Broin, President of the SCSI, described the increases as concerning.

"Given the continued rise in tender prices over a relatively short period of time, it will be a concern for contracting authorities receiving tender proposals for national projects that contractors may well run into financial difficulty half way through – as evidenced in recent school delivery projects," he said.

"If the current trend continues prices will be back at the peak boomtime level of 2007 early next year. The current rate of increase is simply not sustainable in the long term."

(LM/MH)