Ireland output summary
The all building and construction volume index in the Republic of Ireland decreased by -3.1 percent on the quarter and decreased by -11.0 percent on the year as of Q4 2022, reflecting the cooling in new project starts.
Having remained resilient in the previous 12 months despite the challenges of Brexit, with strong growth in 2022, the 12 months to Q4 2022 saw a reduction of -11 percent in the year, with a 3.1 percent reduction in the last quarter.
The residential sector saw the biggest drop, with a -16.9 percent reduction in the year, but with a positive bounce of 1.8 percent in the final quarter. This has continued in the first quarter of 2023 with a noted 7,349 new homes started, which is a 5 percent increase on Q122. With housing a top focus for the Government, this matches the contractor’s expectations of housing being the top-performing sector.
In non-residential construction, the last quarter of 2022 saw a dip of -6.4 percent, reflecting the cooling in tendering and projects starts experienced in the second half of last year. The repeated stories of tech sector job cuts and re-sizing may have led to a pause in commercial activity. However, the professional services and banking sectors have come to the fore and have filled the void for high-quality and highly sustainable office demand to meet their long-term ESG targets.
Source: Central Statistics Office (CSO)
Labour and material inflation
Source: Turner & Townsend
The surveyed contractors have again reported large price increases in certain materials, well in excess of current inflation trends. In particular in this period, concrete, aluminium curtain walling and aluminium composite panels have seen the highest increases, ranging from 12 percent for curtain walling to 22 percent for concrete. It is worth noting that the percentage increases have reduced from those seen 6 months ago, and whilst further increases are anticipated, they remain in single digits which is lower than we have seen over the past few years.
Overall average material costs for projects are reported to have increased by 8 percent in the past 12 months, compared with 18.7 percent for the 12 months before that, and are expected to fall back to 6 percent in the next 12 months.
The average cost of labour is reported to have increased by 4 percent in the last 12 months, with an expected increase of 4 percent over the next 12 months
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