New CIF President Dominic Doheny has called on the Government to work with the construction industry to create an ambitious strategy that delivers sustainable growth, exports and jobs across Ireland today at a meeting of Ireland’s leading construction executives.
Mr. Doheny, who is from Tullamore, Co. Offaly and is joint Managing Director of John Flanagan Construction Ltd, said; “The Government is turning to construction to deliver ambitious targets in the delivery of world class infrastructure, housing and the specialist buildings that attract and retain global companies to Ireland. They must set out with industry a growth strategy that builds our capacity to deliver the sustainable level of 25,000 housing output required annually and the €43billion infrastructure set out in the Government’s Public Capital Programme.
DKM consultants estimate that achieving these targets would see the construction industry grow from €15bn to €20bn by 2020, generating around 110,000 jobs. This could be a transformative period for the Ireland’s economy and society if our industry is supported in the same way Ireland’s food, med-tech and financial services industries have been over the past 30 years.
I believe that industry and Government must collaborate to set out an ambitious strategy for construction similar to those established with the food and financial services industries. The prize is a dynamic economy and society with connected and thriving regional economies that provide opportunity for people to work and live in communities around Ireland. The price of inaction is a continuing housing and homelessness crisis, the decline of rural Ireland and a congested capital choking under the weight of producing over 40% of Irish GDP.”
The industry currently accounts for 7% GNP and the widely-accepted level in a developed but growing economy is 12-15%. The CIF believes that this gap can be filled by supporting regional construction companies to deliver housing and infrastructure outside the Greater Dublin area. The industry currently employs around 140,000 people directly, far more than any other sector in Ireland. So, the potential for regional job creation is huge.
In 2017, the CIF is calling for a significant increase in capital expenditure in the upcoming review of the public capital programme. This review coupled with the imminent National Planning Framework will be seminal for Irish economic development over the next few decades. we must get it right. The Government must help ensure that the construction industry has the capacity to deliver in the coming decade.
However, currently housebuilding, particularly outside Dublin, isn’t viable. Housebuilders cannot gain access to finance at the right terms from banks or other sources. How can we have balanced regional development if there are no construction companies capable of building outside our major urban centres? In addition, infrastructure funding is at record lows and any increase in the budget will not be felt by the civil engineering sector for 2-3 years due to lead in times.”
Dominic Doheny is a graduate of both Bolton Street and Trinity College Dublin and has been the joint Managing Director of John Flanagan Developments since 1989. He is the former Chairman of the Irish Home Builders Association and brings a wealth of personal experience, spanning more than three decades, to the role. He will hold the role for two years.
According to a recent DKM report commissioned by the Construction Industry Federation Construction Prospects to 2020:
The overall volume of construction output is forecast to increase by 8.5 per cent in 2017 and 7.1 per cent in 2018. The average annual growth rate in the period 2016-2020 is projected at 9.1 per cent. The volume of construction output by 2020 is forecast to reach €20.2 billion (in 2015 prices), or just over 10% of GNP/
When the gross value added (GVA) of the industry is measured - its contribution in terms of the wages and profits earned by building workers and construction companies - the construction GVA was valued at €6 billion or 3 per cent of GNP in 2015, compared with less than 2 per cent at the height of the recession and 11 per cent of GNP at the peak.
There were 136,900 persons directly employed in construction in Q2 2016, 6.8 per cent of the total workforce. When persons indirectly employed in those firms and services supplying the construction sector are included, the total number employed was 191,700 or 9.5 per cent of the total workforce in Q2 2016.
There were 63,800 qualified skilled craftspersons with construction-related skills in the whole economy in 2015.
There were around 46,000 self-employed persons in the construction industry in 2015, which corresponds to 36 per cent of the total number working in the industry.
The cumulative labour 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 expansion and replacement demand, the total labour requirement over the next four years is around 112,000 workers.
The total skilled craftspersons working in construction in 2015 was 48,900. The industry will require an additional almost 36,000 skilled craftspersons (including apprentices) by 2020.
The forecast of the total requirement for new apprentices in 2020 is 3,835, over 2,000 above the intake levels for the most recent calendar year (2015).
For more information see: http://cif.ie/images/Publications/Skillsreportfor2020.pdf