“While the hope would be that the downward trend will continue this year, 4 per cent is still a high figure and it’s clear the effects of Russia’s invasion of Ukraine – particularly with regard to increased fuel and energy costs – continue to dominate the market.”, published earlier this week, indicated that annual rate of construction materials price inflation declined from 16.2 per cent in December to 15.5 per cent last month as the rate of energy and raw materials price inflation softened.
SCSI president Kevin James said: “While there are signs the rapid rate of construction inflation has peaked, it is also likely the increased costs of fuel and energy will continue to impact manufacturers for the foreseeable future. The SCSI Tender Price Index has risen by a record 26 per cent over the last two years and concern remains as to how long it will take for inflation to fall to more acceptable levels”.
Economic headwinds and market uncertainty may help to push down market demand and, in turn, prices, he said, with anecdotal evidence that investors in commercial property adopting a “cautious approach”. Figures published by BNP Paribas last week indicated that construction activity slowed across the residential, commercial and civil engineering sectors – mostly large, State-funded projects – last month for the fourth month in a row.