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Dublin: 4 °C Wednesday 1 October, 2014

Warning that Ireland’s construction sector is facing a skills shortage

A new report shows that in 2013, just 8,301 residential units were completed, while in 2006 it was 89,000.

A NEW REPORT by Amárach Research on behalf of the Society of Chartered Surveyors Ireland finds that there will be a growth in construction driven by the private commercial and residential sectors.

However, it comes with a warning that the industry could face a skills and employment shortage in the near future.

Findings state that it is expected the construction output will increase by 30 per cent by 2018 and could lead to the creation of over 30,000 construction jobs, resulting in total employment to the sector of 178,000.

The report states that this is only possible if barriers to development – such as the skills shortage – can be overcome.

Growth

The President of the SCSI, Micheál O’Connor pointed out that while the growth figures may sound considerable, the volume of construction growth will still only reach 7.4 per cent of projected GNP by 2018.

“The report shows a stabilisation in construction output for the first time in several years and that is most welcome. We expect to see a modest increase in growth of around 5 per cent this year with overall output expected to grow by 30 per cent to 2018,” said O’Connor.

However output in 2018 is expected to be still below 2009’s output and still a long way short of the optimum level of 12 per cent of GNP which is seen as the European norm, he said.

Contracted

O’Connor said the industry has contracted enormously from output levels of around €34 billion in 2007 to around €8.8 billion last year.

He recommend that the government act on three key issues.

“Firstly the recovery is Dublin led with limited signs of recovery in many parts of the country. Secondly the lack of availability of finance for development, for mortgages and in public sector construction is seen as a key barrier to growth potential. And thirdly the employment and skills shortages which will and are arising out of the recovery need to be addressed at a national level,” O’Connor said.

The report published today finds that the amount of houses being constructed in considerably less that what it required.

In 2013, just 8,301 residential units were completed, while in 2006 it was 89,000. The ESRI estimates that between 10,00 and 12,000 new houses are needed this year and next and after that the need will double to between 20,000 and 25,000.

Finance

Almost a third of the SCSI members surveyed as part of the report said the availability of finance for both developers and buyers is seen as the primary challenge facing the residential construction sector over the next three years.

Stakeholders who were interviewed for the report said development levies, zoning and the need to move to lower density were all seen as barriers to development.

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