Ireland’s manufacturing sector has been severely impacted by inflation with the wholesale price of electricity rising 260% over the past year while there were also large rises recorded for a range of materials, including steel and timber.
Just days after the Central Statistics Office (CSO) published figures which show Irish consumers being impacted by a 5.5% increase in prices last year, new figures show a similar impact for Irish manufacturers with the cost of materials increasing 8.6% and petrol prices jumping 13.9%.
According to the CSO, the cost of wholesale electricity increased by 260.4% compared to the 2020 average. Other wholesale energy fuels also increased in price, and the index for all energy products was up by 160.6% on 2020 and the price of petroleum fuels was up by 14.2%.
Prices in some construction materials showed large increases during 2021. The average price for rough timber was up 43.1%, while other timber types increased by 20% on 2020 levels. Prices for steel products increased by 17%, cement prices were up almost 5%, insulation up 5.6% and plaster up 13.9%.
Cairn Homes, one of the country’s largest builders, said this month that inflation in construction materials was adding €15,000 to the cost of an average home adding further headaches for a sector racing to meet the demand for housing.
In their 2022 outlook, the Society of Chartered Surveyors Ireland (SCSI) said residential property prices were forecast to increase by 5% this year. Given the sharp rise in the material costs, they called for the removal of planning delays and addressing the procurement and infrastructure issues to help lower the cost of new home construction.
Overall, the CSO figures show the price of goods leaving factory gates in Ireland increased by 4.5%, the wholesale price index shows. Prices received by Irish producers last year fell by 5.3% following a larger reduction of 8.7% in 2020.
The overall index for the Food, Beverages and Tobacco sector increased by 0.2% in 2021 compared with a decrease of 1.5% in 2020. The index for Food Products increased by 0.2% in 2021 while Beverages increased by 0.4%.
Within the Food sector, prices increased slightly last year, up 0.4% with large increases in the prices for Meat and meat products, up 11.2% and dairy products which increased by 9%.
Source: Irish Examiner