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The cost of building in Dublin may be soaring — but it would be a lot higher but for the weak pound meaning construction imports from the U.K. are relatively cheaper.
According to data on Irish construction imports, contractors are capitalising on cheaper U.K. materials. Irish imports from the U.K. have increased by 240% compared to their pre-referendum levels, according to analysis by Fexco Corporate Payments.
The amount spent in the first five months of 2018 was 31% higher than that recorded during the same period in 2017. While this is less than the 152% jump recorded between 2016 and 2017, it is a clear sign that Irish construction firms are ramping up their import boom, Fexco said.
Though sterling has recovered a little since its low point last August, during the first five months of 2018 one euro was worth an average of 87.8p, compared to an average of 77.7p between January and May 2016.
The figures also reveal that Irish construction firms are importing more — and more frequently — from the U.K. The number of transactions rose by 22% between 2016 and 2018, and the average transaction size has nearly trebled from €5,729 in the first five months of 2016 to €15,211 in the first five months of 2018.
Relying on exchange rates and imports is, however, a risky strategy, as the value of the pound could of course rise again.
But importing more can have an upside. "British goods and services are cheaper for Irish builders than they were this time last year — and a bargain compared to their pre-referendum levels — but switching to an import-led procurement strategy is also a way to offset rising cost pressures at home," Fexco Corporate Payments Head of Delaling David Lamb said.
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