The Irish construction industry is facing a skills storage which will hinder its return to growth

New research from the Society of Chartered Surveyors (SCSI) Ireland finds that there will be a growth in construction driven by the private commercial and residential sectors. Read the full Report

Research findings come with a warning that the industry could face a skills and employment shortage in the near future.

 It is reported that construction output will increase by 30% by 2018, which could lead to the creation of over 30,000 construction jobs. This will bring 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. 

Micheál O'Connor, President of the SCSI

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

Output in 2018 is expected to be below 2009 output levels, 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.

 The industry has contracted enormously from output levels of around €34 billion in 2007 to around €8.8 billion last year, according to O'Conner, who recommends 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 than 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 (2014) and next year (2015, after which time, the need will double to between 20,000 and 25,000.

Availability of finance is the big challenge. Almost one-third of the SCSI members surveyed as part of the research 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 interviewed in the course of the research said development levies, zoning and the need to move to lower density were all seen as barriers to development.