Tender price inflation set to remain high
The Irish economy once again performed well in 2017, with GDP growth at 4.8 percent, supported by increasing domestic demand. Sustained growth has pushed unemployment down from 13 percent in 2014 to 6 percent in 2017. Despite concerns and uncertainty over the economic impact of Brexit, it has had no noticeable effect on construction.
The construction industry is booming as Dublin recovers from the 2008 crash. Construction activity expanded 18 percent in 2017 with the office construction sector particularly showing signs of strength.
This level of growth is expected to continue with projects in the pipeline, such as Grangegorman, the new urban quarter being created in Dublin’s north inner city. Major commercial projects include new headquarters for the energy company ESB and the USD150m Capital Docks office and residential building.
Tender price inflation is currently running at 6 to 7 percent per annum. Due to high ongoing demand this level of inflation is likely to continue for the foreseeable future.
|Cost escalation 2017–18:||7.0%|
|Cost escalation 2018–19:||7.0%|
|Location factor (USD):||90.5|
The prospects remain bright for construction activity, which will benefit from government plans to boost foreign investment from manufacturing companies and increase exports. The government also plans to invest USD143bn as part of the National Development Plan 2018 - 2027, investing in the key areas of transport, education, health, residential and sustainability.