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Press Release

Minister Donohoe Announces Research on Innovation and Growth in Construction Industry

Last updated: 12 April 2019
Published: 29 March 2019
From: Department of Public Expenditure and Reform

29th March, 2019

Minister Donohoe Announces Research on Innovation and Growth in Construction Industry

Just over one year since the launch of Project Ireland 2040 and following the recent publication of BUILD Report setting out the performance of the Irish Construction Sector, Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D. announces a new programme of work to drive innovation and capacity growth in the Irish construction sector.

Since the launch of Project Ireland 2040, public infrastructure investment has been prioritised and is estimated to grow to €7.3bn in 2019. Employment levels within the industry have been on an upward trend and output is improving with over 18,000 house completions in 2018, up a quarter on the previous year.

However, the BUILD report shows that productivity in the sector is lower than the European average and highlights the potential opportunities from increasing technology adoption and learning from best international practice. This can ensure a more sustainable sector and drive value for money.

That is why the Government is undertaking this piece of research to identify and assess actions which are relevant to the construction industry in Ireland and set out clearly defined and implementable actions for both the industry and for policy makers.

Minister Donohoe said, “The Government is proactively developing capacity and sustainability in the industry. I look forward to the outcome of the research and working with the industry to implement change and ensure that the construction sector is fully geared up to deliver Project Ireland 2040.”

The Government is firmly committed to the delivery of Project Ireland 2040 and has put in place structures to ensure success including the establishment of the Construction Sector Group. Representing the CSG, Tom Parlon of the Construction Industry Federation welcomed the research saying, “Driving innovation in construction will yield positive returns to the State in the efficient and effective delivery of world-class infrastructure and housing, quality careers for young people and increasing exports. This industry is capable of very high performance as evidenced by the hundreds of Irish construction companies building for the likes of Google, Facebook, and Intel.

We’re extremely positive about the recent first steps taken by the Construction Sector Group to continue to develop a sustainable and innovative construction sector and today’s announcement is another step in the right direction.”

Ends

Notes for Editors:

A Request for Tender has been issued on www.etenders.gov.ie for this work to be carried out. Closing date for tenders is 1st May 2019. The outcome is expected by September 2019. The work will consist of:

A detailed assessment of productivity in the Irish construction sector addressing root causes of existing performance in various elements of the supply chain

A detailed action plan for new approaches to drive improvements through public policy and industry actions

Link to the Construction Sector Group: https://www.per.gov.ie/en/construction-sector-group/

Link to the BUILD report: http://www.per.gov.ie/wp-content/uploads/BUILD-2019-FINAL-2.pdf

The BUILD report published in February is a rigorous assessment of the industry. It shows that since the launch of the Project Ireland 2040, infrastructure investment has been prioritised and increased:

Economy-wide investment in building and construction will grow to €30 billion in 2019.

Public spending on infrastructure will top 3.5% of national income in 2019, among the highest in the EU.

In 2018 housing completions surpassed 18,000, up a quarter on the previous year.

Close to 80% of housing completions are in our towns and cities across Ireland, meaning better connectivity, infrastructure and services for families.

Employment in construction sector has been steadily growing in recent years and now stands at 145,500.

It also highlights that:

Cost pressures continue – the tender price index grew by 7.4% last year putting costs back at peak levels.

Certain trades such as plastering and brick-laying face potential skill shortages.

Productivity growth in the sector is lower than the European average but there is considerable scope to address this.

The Government, working with the Construction Sector Group, is already taking steps to assist the industry to address these challenges. Measures to improve productivity, attract talent from overseas and keep the pipeline of investment moving are all underway.