Labour shortages + Material shortages = Unmanageable delays & price hikes industry-wide
Even where the home-owner is willing and able to pay more, the builder is unable to secure the labour and materials required.
It’s a quandary and the frustration across the industry is beyond palpable. The situation is unmanageable due to the lack of commitment on all sides and the outlook is not favourable.
“Some contractors simply can’t stand over the prices they gave three months ago. They would go out of business if they tried to.” (CIF)
This is a summary of some key points in recent articles across various publications including The Irish Times, The Examiner & The Sun. Read the articles in full via the relevant links below:
1. What’s behind the soaring cost of construction materials?
Tue, Sep 28, 2021, 21:09
Unfortunately, Ireland’s historic & post-Covid shortage of skilled labour & trades are affecting house renovation and extension projects far more than the material cost increases and will be a problem for longer.
“How long can it take to find more apprentices to join the ranks?” said Mr McCarthy (KMC Homes), “That could take years and years to fix that problem. That is a long term problem and in my view that is a much bigger issue than the material cost increases,” he said.
Between suppliers’ struggles with materials making commitment a problem and the serious lack of labour, extensive construction delays are inevitable. It’s very frustrating for home owners and builders alike.
2. Builders walk away from projects
Business Today: the best news, analysis and comment from The Irish Times business desk
Fri, Sep 10, 2021, 06:40
“The CIF says builders cannot afford to work at prices pitched up to 18 months ago when they were tendering for jobs, given the rapid increase in the cost of materials and labour since then.”
But this is only half the problem. Even if higher prices are paid, availability of materials and labour is simply not there. Unreliability & empty promises are creating a back log and stress in an industry already creaking.
3. HOUSE OF PAIN
Soaring construction costs and loss of skilled workers delaying building projects in Ireland
Wed, Sep 01, 2021, 07:00
Adam Higgins, Neil Cotter
“The price is kind of irrelevant, if you can’t get it then it doesn’t really matter what the price is.” (Martin Markey, Hardware Association of Ireland)
This is widely documented re materials supply but the chronic shortage in labour is yet to really take hold.
The explosion in prices and the loss of 20,000 skilled construction workers is pushing home improvements out of reach and shutting down building projects. The reality is builders are cancelling jobs.
CIF: “The perfect storm of Brexit, pandemic & supply will be with us for the coming 24 months most likely.”
4. Irish construction materials and labour costs ‘climb amid global shortages’
Labour shortages long plagued the construction industry and now materials are rising too.
Tue, Aug 31, 2021, 06:50
Eamon Quinn, Business Editor
From Turner & Townsend’s major survey:
“There are numerous reasons for these increases, including increased shipping costs, factory closures due to Covid-19, iron ore and oil price increases and a general shortage of certain materials due to high demand from China and pre-selling of stock materials.”
Currently, the (optimistic) outlook is that “tender price inflation of almost 9% this year will slow to 3.5% in 2022 and to 1.6% in 2023.”
However, “many labour costs are also expected to increase in the coming 12 months.”
“There are plenty of other Covid-related issues which have also adversely affected building and construction output during that time; these include productivity level issues, increased lead-in times and increased programme durations.”
5. @patriciapower_qspm adding her voice to the industry pressures:
Quantity surveyor Patricia Power: Waiting to build ‘could make a difference of €20,000’