Industry & Business

Construction Industry to Experience Most Positive Outlook in a Decade

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Construction Industry to Experience Most Positive Outlook in a Decade

Construction Industry to Experience Most Positive Outlook in a Decade
December 23
16:42 2016

The economy is growing at a solid pace, and the quantity and quality of buildings and infrastructure delivered by the construction industry will play an important role in that economic recovery according to a recent CIF Report on Construction Skills and Prospects to 2020. The report says that there is a significant challenge the industry faces with regard to having an adequate supply of craftspersons and skilled workers to meet the demands on it over the medium-term.

The value of construction output recovered in 2015 to around €12.65 billion (6.2% of GNP), with 12,666 new housebuilding completions. For 2016 the forecast is for 14,000 new dwellings, growing to 20,000 units in 2018 and 32,500 in 2020. This projected level of supply is conditional on the most pressing issues and actions identified in the Action Plan for Housing and Homelessness being addressed. The average annual growth in the total volume of construction output in the period 2016-2020 is projected at around 9 per cent. Construction output is forecast to reach €20.2 billion (in 2015 prices) by 2020, or just over 10% of GNP.

There is increasing optimism around the prospects for the private non-residential construction sector. There are growing deficits in public sector infrastructure, following years of reduced investment. Progress on addressing these deficits will be made over the period 2016-2021 using the €42 billion of investment in the Capital Plan and the further €4 billion to be provided, according to the Programme for Government.

Direct employment in construction is expected to increase from an estimated 137,000 in 2016 to around 213,000 by 2020 or by 76,000. This would generate direct and indirect employment combined of almost 300,000 by 2020. There will be significant replacement demand for workers required to do the jobs of individuals who leave the labour market as a result of illness, retirement or death. The cumulative replacement demand in the period 2016-2020 is estimated at almost 36,000 construction workers, which is significant in the context of the total expansion demand by 2020. Based on the expansion (76,000) and replacement demand (36,000), the total labour requirement over the next four years is around 112,000 workers.

An enhancement of the skills capacity in the industry is required to ensure the industry can deliver the demands placed on it over the medium-term. Accordingly the report’s main recommended is that that Government and industry should collaborate to establish a Construction Skills Forum within the current National Skill Strategy Group between the Departments of Education and Skills and Jobs, Industry and Innovation, to monitor progress and address barriers in the education and training system which are impeding the delivery of the required skilled employees.

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