As 2019 draws nearer to a close, it is a good time to reflect on the activity within the Irish construction sector owing to a year of extensive growth. The Sonas Report 2019 recaps on this years positive growth and expansive projects in the construction sector while casting an eye on the optimistic future that awaits us in 2020.
The developments in the construction sector can be captured from a quantitative perspective by analysing the employment, growth and salary statistics. Although these figures are highly relevant for anyone considering progressing within the industry, we cannot disregard the major projects highlighted in 2019, both Civil and Building, which has branded Ireland’s economy as the fastest growing in the European Union to date.
As the demand for skilled labour in the construction industry rises, there remains an increased pressure on employers to offer competitive salaries. Based on positions we have recruited at Sonas in the last 6 months, here is some averaged data on the salaries accepted.
A comparison of the value of construction output over the last 11 years illustrates the steady progression in the accumulated value of the construction projects throughout the year. With an increase of over 2 billion in the output value from 2018 to 2019, the construction sector shows no signs of slowing as 2020 approaches. Construction output as a percentage of GNP has reached a new high in this decade with a figure of 8.7%.
A new report by DKM Consultants shows that the Irish construction industry can grow on average by 9% per year but warns there are potential skills shortages. CIF Director General, Tom Parlon stated at a launch of the report: “Over the next three years, this report estimates that we will need 112,000 additional workers in construction to deliver on the ambitious targets set out in the Government’s €43billion Capital Programme, the Rebuilding Ireland Strategy and in meeting the increasing demand from Foreign Direct Investment companies for specialist buildings.”
Given what the industry has been through during the recent economic crisis, it is not surprising that stakeholders remain somewhat cautious when asked about their expectations for the future. Nonetheless, activity levels within the industry are continuing to rise and things as a whole are looking very positive. The pipeline of work for the Irish construction industry is strong. Long-term capital investment commitments have been made by Government (Project Ireland 2040).
Ireland continues to be an extremely attractive location for investors, both domestically and internationally, despite the uncertainty that surrounds Brexit. Continued investment across the various sub-sectors of the industry will be key in terms of Ireland’s competitiveness and our ability to continue to attract multinational foreign direct investment. Positively, growth is expected across all categories for the coming years, but there is a decline in the number of surveyors who are anticipating growth. Average hourly earnings for all construction employees increased by 6.2% on an annual basis in Q4 2018, with similar figures expected for Q4 2019.
Here are some of the key figures that again outline the positive nature of the Irish construction Industry:
- 83% rated the outlook for the next 12 months as positive for their business
- 58% experienced increases in construction activity in 2019
- 71% expect workloads to rise over the next 12 months
- 56% reported that they are operating at full capacity – an increase of 39% on the prior year
SUSTAINED GROWTH YoY
The positive signs from 2018 have followed into 2019 with almost 60% of all people across all sectors of the construction industry reporting an increase in their workload in the past year, which is consistent with last years results, proving an ever-growing industry.
The private residential market had another busy year in most parts of the country and activity levels in the sector continue to rise. In 2018, the CSO recorded 18,072 new dwelling completions representing a 25% increase in the total number of new homes built in the 12-month period. There has been some suggestions of a moderation in the pace of growth in the private commercial market however. €7.3 billion was committed in direct capital funding in 2019 and this figure is due to increase by 10 per cent to €7.9 billion in 2020.
NOTABLE PROJECTS | 2020
The National Children’s Hospital €1.43 billion.
Latest Update: 27th of November: During the latest Oireachtas committee on health, we heard that construction of the new national children’s hospital is behind where it should be as its development board chairman Fred Barry has said that one critical milestone – the removal of a road running through the site – had been missed. Nonetheless, he did make it clear that there was still 3 years before the completion of the projects and they hope they can make up some of the lost time in these 3 years.
Intel New $4bn Plant in Leixlip.
In November, Intel welcomed a decision to grant planning permission for its proposed new $4 billion (€3.63 billion) manufacturing fabrication facility at its Leixlip plant and said that preliminary work on the project is already underway. Intel, which has invested $15 billion in its Leixlip site, this year marks 30 years in Ireland. In total, the two planning permissions represent a $8 billion (€7.26 billion) investment which will employ 6,000 construction workers at peak and 1,600 full time jobs on completion. By its estimates, the company claims to contribute €1.08 billion each year to the Irish economy and supports 6,669 full time equivalent jobs.
Dual carriageway from Westport to Turlough plans to cost €241 million
The road development, which will cost €241 million, involves the construction of 20.3km of dual carriageway from Westport to Turlough and a 2.5km single carriageway link to the N59 Westport to Mulranny national secondary road.
€1 billion investment in Ireland’s heavy rail infrastructure
MINISTER FOR TRANSPORT, Tourism and Sport Shane Ross announced a €1 billion investment in Ireland’s heavy rail infrastructure over the next five years. The investment in civil engineering programmes for the network will include track relaying, signalling improvements and safety-related initiatives from 2020 to 2024.