Paul McGrath (Westmeath, Fine Gael)
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Question 354: To ask the Minister for the Environment, Heritage and Local Government if his attention has been drawn to the recent 70% price increase in the cost of steel for the building industry; if his attention has further been drawn to the scarcity of this product; if he will assess this situation and the impact on the building industry, particularly the cost of new houses and major infrastructural projects; and if he will make a statement on the matter. [16416/04]

Martin Cullen (Waterford, Fianna Fail)
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Construction inflation, which had reached 12% in the period 1998 to 2000, had fallen to 4% in 2003. Notwithstanding this, recent reports from the construction industry suggest that construction tender prices had bottomed out by the end of 2003. It is too early to determine what effect, if any, an increase in steel prices could have on tender prices in the construction industry. My concern is with any overall rise in total construction costs, and industry sources suggest that the recent price increases for steel will have relatively little impact on total costs. However, it is possible that such an increase could trigger price variation clause increases in a limited number of public and private sector contracts. I intend to keep this matter under review.