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Increased Confidence In Irish Construction Industry Amid Challenges

The latest SCSI/PwC Construction Market Monitor is out which finds increasing confidence in the Irish construction industry amid concerns over skills shortages within the sector.

The research compiled is made up of the views, perceptions and opinions of almost 300 chartered surveyors, as well as input from SCSI, PwC and other industry participants.

An overhelmingly positive outlook for the year ahead was found, with 90% of chartered surveyors expecting increased activity, while 63% expect increased profits.

It was found that 56% of chartered surveyors have experienced an increase in construction activity in the last six months, a figure representing a 10% increase on the previous six months.

The monitor shows 71% of chartered surveyors have seen an increase in private housing over the last six months, an increase of 13%.

68% have seen an increase in private commercial, an increase of 10%, while 44% have seen an increase in infrastructure, an increase of 14%.

Acute Challenges

The number of surveyors experiencing skills shortages has increased by 7% in the last six months to 81%.

This figure is particularly relevant for professions and trades such as quantity surveyors/commercial managers, plasterers, carpenters, electricians and bricklayers.

77% of those surveyed said that they had experienced problems with planning and regulations during the last six months.  While this is the same as 2017, it means that planning and regulatory challenges have been identified as the next biggest challenge after the skills shortage.

While 55% of surveyors say raising finance is an issue, this is down 13% on the previous six months.

On the topic of finance, Joanne Kelly, PwC Ireland Real Estate Leader said:

“While a key challenge, the survey does highlight some easing in raising finance in the period March 2018 to September 2017.  Initiatives announced in recent months, such as the Home Building Finance Ireland (HBFI) fund, which is aimed at increasing access to finance for residential construction have helped.  However, respondents also indicated that cash flow, liquidity and delays in payments are also issues.

“Certain companies, particularly SMEs, are still facing difficulty in accessing reasonably priced finance. There remains a legacy from the downturn where construction companies had negative experiences or a poor track record with lending institutions. However, this seems to be more of an issue for regional and secondary projects.”

Joanne Kelly concluded:

“For an open economy that relies heavily on Foreign Direct Investment and exports, it is critical that we have the housing and infrastructure to support it.  While the report outlines some acute challenges, it is encouraging that plans have been outlined in Government’s Project 2040 Plan for significant infrastructure and housing investment.”

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