Construction leaders expect more building next year

Survey finds little evidence ‘on the ground’ of plan to deliver 47,000 social housing units

The Department of Housing estimates  14,932 homes were built in the State last year based on ESB electricity connections data. Photograph:  iStock

The Department of Housing estimates 14,932 homes were built in the State last year based on ESB electricity connections data. Photograph: iStock

 

Almost three-quarters of Ireland’s construction industry leaders expect commercial and residential building to increase over the next year even as the industry struggles with staffing issues and uncertainty relating to Brexit, according to a new survey.

The 2017 Society of Chartered Surveyors Ireland/PwC Construction Industry survey also found that there is little evidence of the Government’s plans to deliver 47,000 social housing units over the next six years “being experienced on the ground” as the initiative is dogged by lack of investment and public procurement delays.

Some 73 per cent of companies in the construction industry are experiencing difficulties recruiting people with specific skills, from plumbers and plasterers to quantity surveyors and engineers, according to the survey.

Top challenges to filling available posts are lack of available workers due to emigration, “unrealistically high remuneration expectations” and a lack of skilled sub-contractors, the authors of the report says.

Some 90 per cent of those surveyed in the residential construction industry expect more homes to be built over the next year. The Department of Housing estimates that 14,932 homes were built in the State last year based on ESB electricity connections data.

High costs

This compares with a peak of about 90,000 a decade earlier, and estimates from the Economic and Social Research Institute (ESRI) that 25,000 new homes are currently needed every year.

“The underlying issues still remain such as high costs of delivering housing to the market,” MediKids and PwC said, noting that a MediKids report published last year said over half of the costs of delivering a house or apartment was made up of “soft costs” such as levies, VAT and connection charges.

“The projected increased activity in the Irish construction industry is principally driven by the residential sector, where a number of plans have been announced, particularly in relation to social housing” said Niall Cogan of PwC.

“According to the survey, however, the Government’s plans to deliver 47,000 social housing units over the next six years is not being experienced on the ground. Respondents say the lack of investment and delays with public procurement are the main reasons for low unit numbers being currently completed.”

Impact of Brexit

Meanwhile, two-thirds of respondents expect non-residential construction to rise in the year ahead.

More than a third of all businesses in the industry fear that Brexit will have a negative impact on their businesses, with a similar proportion of respondents unclear about the impact.

Some said they expected an increase in price for Dublin office space as UK-based firms move operations to elsewhere in Europe to maintain access to the single market following Brexit.