Construction recovery set to begin in 2012

One of the world’s largest construction consultancy firms has predicted Ireland’s building industry will start to recover by 2014 — but will remain weak until 2020.

In its annual review of the Irish construction industry, Davis Langdon said the decline in activity had actually slowed. It predicted building output for 2012 would be €7.75bn, 9% less than in 2011. The decline from 2010 to 2011 was 27%.

However, Paul Mitchell, head of Davis Langdon’s Irish operations, said the market is still operating at a “completely unsustainable level”.

The consultancy expects the malaise in output to bottom out in 2013 and that “low single-digit growth” will return from 2014 onwards.

Mr Mitchell said a sustainable construction level here would be equal to 12% of GNP which would be €16bn currently, more than twice the estimated output of €7.75bn for 2012: “Even with an optimistic 15% year- on-year growth from 2012, it could take until 2020 to reach the optimum level of output required for a proper functioning construction industry.”

Mr Mitchell said the 14% cut in the Government’s Public Capital Programme for 2013 would further reduce output.

Tom Parlon, CIF director general, said it had seen activity drop from €38.6bn in 2006 to €9.2bn in 2011. He said employment in the sector fell from 269,900 in 2007 to 102,600 in the first quarter of this year.