The Irish construction industry grew by significantly last year with a further strong year expected in 2018, according to an Aecom survey of professionals in the construction sectors in the Republic and Northern Ireland.
Aecom figures in its Ireland Annual Review 2018 show that Northern Ireland’s construction industry output value grew by 11.6% in the 12 months to Q2 2017 and by 18% in the Republic of Ireland.
The Republic is expected to grow a further 14% to approximately €19.5bn in 2018.
In the Dublin area the growth in output has been driven by the commercial and foreign direct investment sectors. The residential, transportation and utilities sector have not kept up with the demands of a growing economy.
Dublin’s commercial market continued to strengthen, with developers and investors continuing to see strong demand for office accommodation.
Increased construction activity also extended beyond the Greater Dublin area last year.
There was some movement last year in the residential sector, which historically has been the key driver of output, but which has been struggling to respond to the housing crisis.
The number of commencements increasing in the first eight months of the year to 4,055 — a 25% increase from a very low base for the same period in 2016.
The report notes that it is very positive that there is an 18.5% increase in value terms in the public sector capital programme budgeted for 2018.
However, there is a concern around the delivery of this significant increase, with questions raised over whether various government departments have the shovel-ready projects available to implement the planned increase in public capital spending.
The pace of development of public infrastructure is likely to continue to be hindered by a lack of internal resources, a challenging planning process, inappropriate procurement routes and time-consuming approvals structures.
John O’Regan, head of buildings and places at Aecom Ireland, said: “Some big issues remain for Ireland’s construction industry, namely Brexit and its potential impact on new construction project demand, as well as the availability of resources and tender inflation.
“Despite those issues, the future looks promising. The positive news is that the opportunities for economic growth and increased foreign direct investment are great and dynamic approaches to addressing challenges are making a difference.”
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