“The output of the Irish construction industry in 2017 amounted to approximately €17.5 billion, which represents an increase of 17% over the 2016 level and follows on from a similar increase the previous year,” says Derry Scully. “We expect a similarly significant increase of 15% during 2018, which will bring output to just over €20 billion. The total increase in output in the three year period from 2015 will be almost 60%. However, even with these impressive growth rates, the output in 2018 will still only be at 2001 levels, and will be just over half of the 2007 peak output of over €38 billion, albeit it that this was an unsustainable level.
“With an output level of €20.1 billion in 2018, construction will represent approximately 7.6% of Ireland’s GNP. This is well below the recognised European sustainable level of 10% to 12%. Assuming that construction output continues to increase at twice the percentage increase in GNP, it will be another eight to ten years before Ireland reaches this European norm, comments Scully.
He continues: “all sectors of the Irish construction industry are contributing to the recovery in output, with the private sector recovery initially led by new commercial office space and office fit-outs in the Greater Dublin Area (GDA). These are continuing, and during 2017, the recovery began to spread to Cork and other major urban centres also. Projects in the Hospitality and Retail sectors are also beginning to be seen once more, again starting within the GDA. In the FDI Industrial sector, the IDA continues to attract multinational companies to invest in Ireland, particularly in the Data Centre and Life Sciences sectors.”
Turning to the public sector, Derry Scully says: “Budget 2018 the Government provided for an average increase of 17.4% to the public capital expenditure programme, with the provision for housing rising by over 62% this year. The Government has also recently published Project Ireland 2040 which includes the new National Development Plan 2018 – 2027. This provides for a €116 billion plan to upgrade State infrastructure in line with a population increase of approximately one million people over the next ten years.
“Public capital expenditure is planned to rise from €4.5 billion in 2017 to €5.8 billion in 2018, with further increases to €7.3 billion and €7.9 billion in 2019 and 2020 respectively. The plan prioritises expenditure on education, housing, roads and hospitals. Amongst the projects included in the plan are new motorways, including one linking Cork and Limerick, a second runway for Dublin airport, a metro link from Swords to Sandyford with a stop at Dublin airport, a new Technological University for the South-East and €10.9 billion invested in health projects.
“Residential construction has traditionally represented a major component of the overall Irish construction industry. There is ongoing controversy about the number of residential units constructed annually, but all agree that output in recent years has been well below the required levels. This has led to significant accommodation shortages and increasing rental levels.”
For a more extensive article see our March/April 2018 Issue of Irish Construction Industry Magazine available on subscription, contact Linda Doran email@example.com