‘Construction output growth to create 30,000 jobs’
A report by Amárach Research, commissioned by the Society of Chartered Surveyors Ireland (SCSI), finds that the predicted growth will be driven by activity in the private commercial, and residential sectors.
SCSI president Micheál O’Connor pointed out that while the growth figures may sound considerable, the volume of construction growth will still only reach 7.4% of projected GNP by 2018.
He said: “The report shows a stabilisation in construction output for the first time in several years and that is most welcome. We expect to see a modest increase in growth of around 5% this year with overall output expected to grow by 30% to 2018.
“However output in 2018 is expected to be still below 2009’s output and still a long way short of the optimum level of 12% of GNP which is seen as the European norm.
“The industry has contracted enormously from output levels of around €34bn in 2007 to around €8.8bn last year.”
Mr O’Connor called on the Government and stakeholders to act on the three key issues which emerged from the report: “Firstly the recovery is Dublin led with limited signs of recovery in many parts of the country,” he said.
“Secondly the lack of availability of finance for development, for mortgages, and in public sector construction is seen as a key barrier to growth potential.
“And thirdly the employment and skills shortages which will, and are arising, out of the recovery need to be addressed at a national level.”
The research found almost a third of the SCSI members surveyed said the availability of finance for both developers and buyers is seen as the primary challenge facing the residential construction sector over the next three years. Stakeholders said that development levies, zoning, and the need to move to lower density were all seen as barriers to development.
On the commercial front, the lack of supply was identified as a key challenge and falling vacancy rates — down to 9% in central Dublin — had led to rent increases.
“However the rise in rents is bringing construction projects closer to viability and according to members, more controlled speculative development is needed to ensure that large multinationals coming to Ireland can source suitable accommodation rather than waiting the 24 to 36 months needed for construction,” SCSI said.
The surveyors’ body called for the appointment of a chief construction advisor to the Government to ensure that there is greater coordination around policies to return the construction sector back to sustainable levels.
