Turnover and employment continued to increase in the construction sector during the second quarter of this year and the trend is expected to continue, according to the Construction Industry Federation (CIF).
The group’s construction outlook survey, which is carried out quarterly, canvassed 231 construction companies in July.
A third of companies surveyed reported a year-on-year increase in turnover, while 30 per cent reported a year-on-year increase in the total number of people they employed, with 26 per cent expecting to employ more staff in the coming months.
Some 28 per cent of companies reported an increase in revenue from new orders. This was reported across general contracting and home building, with a decrease in new order revenue across civil engineering and specialist contracting.
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All sectors said they expected an uplift in the third quarter, with the exception of civil engineering.
The cost of labour and raw materials continued to put upward pressure on pricing across all sub-sectors, as 67 per cent of businesses said they experienced a year-on-year increase in the cost of labour.
Two-thirds reported a year-on-year increase in the cost of raw materials, while 54 per cent of companies said they expected the cost of labour to continue to increase in the third quarter.
CIF director general Hubert Fitzpatrick said Ireland’s demand for investment in critical infrastructure will reach beyond the existing capital ceilings, especially in water services, housing and transport.
“The CIF is calling for an expansionary budget in 2025 to support Government’s competing policy choices in the year ahead, in the context of Europe’s twin green and digital transitions and growing geopolitical and economic instability,” he said.
“Hyperinflation in many building and construction materials in recent years, as well as fuel, has put a strain on the cost of delivering some of the infrastructure projects in the National Development Plan, as capital budgets are predetermined.
“Though easing, the duration of inflation and rising prices remains somewhat uncertain. Slow economic growth and diverging levels of inflation across European member states is now a reality.”
Mr Fitzpatrick said cities, provincial towns and regional communities require Irish construction companies to deliver billions of investment in critical infrastructure under the National Development Plan to drive economic growth.
“At a minimum, Irish society needs the construction industry to deliver at least 50,000 housing units annually from now until 2050,” he said. “For economic growth to be sustained, investment momentum must be supported.”
The survey also found that the key challenges facing the construction sector were access to skilled labour, securing a healthy profit margin, increased cost of materials, and continuity of work.
“The industry has always demonstrated its capacity to ramp up and secure the required resources for delivery and can reallocate resources from sector to sector as required,” said Mr Fitzpatrick.
“Sightline on a credible pipeline of shovel-ready infrastructural construction projects is crucial to provide confidence for the sector to ramp up investment and secure the resources needed for project delivery.
“We urge Government to increase investment in the country’s critical infrastructure needs and to continue to support positive initiatives to educate young people about the rewarding career opportunities in construction.”
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