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Spiralling costs, scarce materials and penalties: How Brexit could impact the housing crisis

Increased costs and problems securing staff could hinder the industry’s response.

The building sector is being urged to be Brexit ready.
The building sector is being urged to be Brexit ready.
Image: Eamonn Farrell/RollingNews.ie

RESEARCH BY THE Construction Industry Federation (CIF) has raised concerns that Brexit could hamper the response to the housing crisis by making construction more expensive.

The survey gauged the Brexit preparation of CIF members and found significant concern about spiralling costs in both the supply chain and in penalties due to Brexit induced delays.

It found that 42% believed that Brexit will have an immediate negative impact on their businesses.

“In the immediate term post-Brexit, the supply-chain will be extremely challenged to absorb costs and many companies have already been struggling with increasing input and labour costs in the industry with minimal cost recovery,” CIF director general Tom Parlon said in a message to members.

Delays in the delivery of materials also has potential to lead to penalties and additional costs that contractors and their sub-contractors could struggle to address.

“With house building so tenuous outside the greater Dublin area, even minimal Brexit-driven increases could be the difference between securing development finance or otherwise,” Parlon added.

In further CIF warnings that accompanied the survey, the importance of the building sector in dealing with Ireland’s housing crisis is stressed and it is noted that it is critical that the industry is “both Brexit ready and proof”.

As well as the potential problems thrown up by an increase in costs, the CIF has also warned that Brexit could pose a problem in the access to skilled workers.

The survey of members found that just under a quarter feared problems in assessing the required talent after Brexit.

“A reduction, however limited, in an already small pool of skilled workers, will cause huge strain in an industry with a decade-long pipeline of activity,” the report states.

Business group Ibec said in January that between 80,000-100,000 workers would be needed to meet government construction targets and estimated that there is a shortfall of between 60,000 to 80,000.

Ibec suggested that there would need to be a significant growth in the number of non-Irish construction workers coming here to bridge that gap.

In its report, CIF said it did not envisage an influx of construction workers coming from the UK post-Brexit and that an increased demand for workers “will intensify the war for labour and talent in the sector”.

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Rónán Duffy

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