The value of construction activity in Ireland is expected to grow by just over €1 billion to approximately €11 billion in 2014 and create up to 10,000 additional jobs. That’s according to the Construction Industry Federation (CIF), who point to the strong level of work that is expected to take place during the upcoming year.
The CIF estimates the value of construction activity in 2013 came to approximately €9.9 billion, up from the 2012 level of €9.07 billion. Additionally construction employment as measured by the Central Statistics Office (CSO)’s Quarter National Household Survey grew by 9,100 between Q1 and Q3 2013 .
The CIF has cited a variety of reasons behind the expected increase in activity. These include:
- The €6.8 billion of large and medium projects already scheduled for 2014 as recorded by Construction Information Services.
- More projects under the National Stimulus Plan progressing to onsite activity, along with the Government’s commitment to bring forward more projects when possible.
- The further rollout of the €2 billion in working capital and the €2 billion in seed finance promised by NAMA. 2014 marks the third year of those four year programmes. Additionally during the Budget, the Government also said that NAMA might make more working capital available if the market conditions allow it.
- A modest increase in house building, centered around the larger urban areas. This will be generated by the growing demand for houses in urban areas, the increased availability of mortgage finance and the expected return of development finance for viable housing projects.
- Interest in smaller construction projects generated by the Home Renovation Incentive scheme.
- The predicted return to commercial construction activity in Dublin City Centre (Cited in the CBRE Irish Commercial Property Outlook) along with the strong demand for more corporate office headquarters in Dublin City Centre regularly referred to by the IDA.
- The continued rollout of Irish Water meters is another source of activity around the country.
- There should be a number of other provisions which will benefit the industry such as the Living City Initiative and others.
- The substantial increase in tenders being made available to CIF members.
“We are expecting to see a strong increase in construction activity during the course of the coming year,” said CIF Director General Tom Parlon. “For the first time in 7 years there are a lot of reasons for the construction sector to have a positive outlook for the upcoming year.
“You can see a wide variety of reasons why we expect the industry to grow on a macro level in the next 12 months. The sector turned the corner in 2013 and all the expectation is we will see further growth during the year. Given the number of factors in play that will generate activity during the coming year we predict that the sector will grow by approximately €1 billion on a national level. This will bring the overall value of the sector to an estimated €11 billion.
“We’ve seen already how a small increase in construction activity can create a lot of employment so we believe that an additional 10,000 jobs will be generated in the sector over 2014. For example in 2013 there was a 1.9% increase in activity between Q2 and Q3 2013 according to the CSO’s ‘Production in Building and Construction Index’. That coincided with a jump in employment of 2,700 jobs. We would expect the level of activity increases to at least match those levels at a quarter on quarter basis during 2014.
“There are also a number of other reasons for the surge in confidence that has been experienced in the industry. The Construction Contracts Act will take effect from the spring which will boost the flow of payments around the industry. The new building regulations will come into effect on 1st March 2014. The new register of Irish construction companies will be launched in March. Government has begun undertaking a review of the Government form of construction contracts, while a review of public procurement also likely. All these various measures will all help the construction sector.
“When you also take into account the Government’s commitment to bring forward more measures to boost the sector, we think 2014 will be a very positive year for our industry,” Mr. Parlon concluded.