The conflict in the Middle East has contributed to Irish commercial construction project costs rising by the largest rate in several years.
New data from the Society of Chartered Surveyors Ireland (SCSI) tender price index showed commercial construction prices increased by 3 per cent in the first half of 2026.
The findings are in sharp contrast to the body’s previous index published in February of this year, which showed cost inflation in the commercial building sector was at the lowest rate for five years. In the space of six months, the inflation rate has trebled.
SCSI president Tomás Kelly said the conflict in the Middle East and a rise in the prices of specific building products were the key drivers to the trend reversing.
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“The majority of chartered quantity surveyors surveyed pointed to the Middle East conflict as a major driver of material price changes, with the impact expected to particularly influence the price of oil-based materials,” Kelly said.
“Others highlighted the fact that the Middle East conflict would have a direct impact on supply chains.”
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Last year, SCSI tender price index showed the annual median rate of inflation was 2.5 per cent nationally in 2025, down from 3 per cent the previous year.
According to the latest data, the annual median rate of inflation for the past 12-month period has risen to 4 per cent. Last month, data released by the Central Statistics Office showed material price changes for key building materials in June, with copper pipes and fittings up 8.7 per cent in 12 months.
Kelly said SCSI quantity surveyors surveyed have highlighted pressure on material prices and a shortage of skilled labour as other factors causing upward pressure on tender prices.
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In the second half of last year, inflation rates in commercial construction in Dublin and the wider Leinster, excluding Dublin, had eased to zero per cent.
The latest index showed tender prices were up 2.5 per cent in Dublin in the first half of the year, while the median change in the rest of Leinster was 2.3 per cent.
Elsewhere countrywide, the highest inflation rate was recorded in Munster at 3.3 per cent and on a 12-month basis prices were up 4.8 per cent.
That same annual rate of price increase was recorded in the combined Connacht and Ulster regions, where prices were up 4.8 per cent in the year and 3 per cent in the first six months of this year.
Kelly said the significant change in tender prices in the six months has led to chartered quantity surveyors finding it difficult to cost projects.
“For many projects, the issue is not simply whether the price of materials is rising, but the extent to which contractors can confidently price materials over the life of a tender and construction programme. For now, it’s clear that ongoing uncertainty is a factor in the increasing trend in tender prices.”
