This year's figures from the Society of Chartered Surveyors have exposed a dramatic urban/rural divide in the construction sector.
The cost of rebuilding an average three-bedroom semi-detached house in Dublin has doubled in five years. Even in the past year, the cost, as estimated by the society, increased by almost 18 per cent.
The picture for the rest of the State is quite different. With a rise of 2.5 per cent, the cost of rebuilding a similar standard house in Cork has remained below general inflation in the 12 months to July 2001. The rate of increase for Galway for the same period was only 1.5 per cent.
What can account for the disparity in building costs inflation between Dublin and the other major cities? According the Construction Industry Federation (CIF), the western, southern and midlands regions have experienced a slowdown in the construction sector since the beginning of this year.
A CIF spokesman said its members outside the capital were looking for projects to keep on workers. At the same time, there is still a backlog of work in Dublin. Labour costs in the Dublin area were identified by the surveyors group as the primary driver of high building costs. The problem with a one-off small job is getting someone to do it and the demand has put building labour at a premium.
Building materials are also more expensive in the capital. The CIF spokesman gave an example of a fitted floor purchased recently for an apartment. Material that cost £45 per square yard in Dublin was later sourced in Kilkenny for £29 per square yard.
The congested traffic network and traffic restrictions increase transport costs for jobs in Dublin and waste disposal costs have rocketed. Six years ago it cost in the region of £100 to fill a skip with seven or eight tonnes of rubble in Dublin. The same load today could cost up to £1,000, according to the CIF.
At the beginning of this year, the CIF predicted 7 per cent growth in the construction sector but, in its mid-term review in June, that was revised down to 2 per cent. Clearly it's those federation members outside the Dublin area who are feeling the pinch.
