Fears construction recovery will stall

Recovery of the construction industry will stall if contractors cannot secure more tenders in certain parts of the country where activity is stagnant.

The Construction Industry Federation (CIF) further warned that access to credit for members remains a “serious and common problem” while building costs are also a worry.

The comments came after the federation carried out a ‘confidence survey’ among its members.

Some 31.7% of respondents said access to credit was the biggest impediment to growing their business, while 35.9% pointed to lack of available tenders.

“Whilst there is a recovery, it is not uniform and there are few tenders coming on stream in certain parts of the country and in certain sectors,” a CIF spokeswoman said.

“If the number of tenders does not increase, the recovery may stall.

“Members report that as with other industries, access to credit is both a serious and common problem. Currently banks are looking for between 40% and 60% capital from companies wishing to finance a project.”

CIF said its survey found the cost of building was also a significant concern.

“In some parts of the country, the construction costs are higher than the likely selling price for any end product.”

CIF also said there were 30,000 live planning permissions in the Greater Dublin Area, but 21,000 relate to apartments.

“Other than in the city centre, there is little appetite for this kind of development,” it said.

Despite some concerns, the survey found that, overall, more than half of construction companies expect their business to grow this year.