Inquiry levels are up, and previously-shelved construction projects are being resurrected or revisited.
That’s the view expounded this week by international asset managers, and professional advisory and Fortune 500 firm AECOM in its just-launched Ireland Annual Review 2016: it forecasts the construction industry nationally is set to experience strong, double-digit growth after a 14% rise in construction output (to €12.25bn) in 2015, on the previous year’s performance.
The AECOM annual review, due to launch tonight in Cork’s Hayfield Manor hotel, notes that “the Irish construction industry gradually returned to growth in 2014 after the dramatic drop between 2007-2011 and this growth pattern has continued in 2015,” and predicts “construction activity in Cork and across the country will continue to grow in 2016.”
However, AECOM’s Cork-based cost management specialist Glenn Hanna says the residential sector nationally remains in a dysfunctional state, with just 12,000 completions in 2015 and uncertainty coming in the latter half of that year due to Central Bank policy changes.
He anticipates the bulk of activity will be in the starter homes market this year in Cork, and singles out locations like Carrigaline among a handful of others where building is ongoing, and on Nama sites, as well as sites due on stream with O’Flynn Construction.
(Separately, new Cork firm Citidwell Homes say they will build 50 new homes in the next year, and 100 a year after that in Cork, and are due launch their 28-house scheme Sheridan Park on Tramore Road this weekend with Sherry FitzGerald. See Saturday’s Irish Examiner Property & Interiors for more details).
Despite a return of confidence, “we are continuing to issue a note of caution that the upturn has been concentrated mainly in the greater Dublin area.
“Notwithstanding this, we have seen the beginnings of recovery in Cork with an increase in the number of enquiries, along with previously shelved projects being revisited,” says AECOM’s Mr Hanna.
In the Cork commercial sector, new office build activity is sluggish, but “the completion of One Albert Quay has led to renewed confidence which is likely to make sites like the Capital Cinema, O’Callaghan’s proposed development on Albert Quay and the Cork Science and Innovation Park a reality,” he said.
Mr Hanna also notes activity related to IDA Ireland announcements, instancing Apple, GE Healthcare and Pfizer shows “the prospects for construction activity in the industrial sector are strong.”
Other activity is expected at the €70 Páirc Uí Chaoimh rebuild, the Event Centre site (which is expected to drive a need for more hotel beds), and in the health sector, at the HSE’s St Mary’s campus, and at the Bon Secours.
On the retail front, construction will grow in 2015, but less than a decade ago and “notwithstanding the improved consumer confidence, the challenging financial environment makes capital investment decisions more difficult,” say AECOM.
On the broader front, the report expects construction costs to rise by 2.5% in 2016, and forecasts tender prices to rise on average by 6%, and 5% outside of Dublin, after 5% growth in 2015.