Output value is expected to increase by a further 14% to approximately €19.5bn (£17.2bn) in 2018.
The Aecom Ireland Annual Review of the Construction Industry includes the results of a survey of professionals in the construction and property sectors in Northern Ireland and the Republic of Ireland. It found that growth in construction output has been focused on the commercial and foreign direct investment sectors. The residential sector, transportation and utilities have not kept up with the demands of a growing economy.
Aecom launched the review at an event in Dublin. “Some big issues remain for Ireland’s construction industry, namely Brexit and its potential impact on new construction project demand, as well as the availability of resources and tender inflation,” said head of buildings and places, Republic of Ireland, John O’Regan. “Despite those issues, the future looks promising. The positive news is that the opportunities for economic growth and increased foreign direct investment are great and dynamic approaches to addressing challenges are making a difference.”
Last year saw Dublin’s commercial market continue to strengthen, with developers and investors continuing to see strong demand for office accommodation. A considerable number of commercial properties are still under construction and 2017 also saw increased construction activity extending beyond the Greater Dublin area.
The residential sector, which historically has been the key driver of output, has been struggling to respond to the housing crisis. There was some movement in 2017 with the number of starts increasing in the first eight months of the year to 4,055 - a 25% increase from a very low base for the same period in 2016.
The report said that it is very positive that there is a budgeted 18.5% increase in value terms in the public sector capital programme for 2018. However, there is a concern around the delivery of the increase, with questions raised regarding whether various government departments have the ‘shovel-ready’ projects available for implementation this year. The pace of development of public infrastructure is likely to continue to be hindered by a lack of internal resources, a challenging planning process, inappropriate procurement routes and time-consuming approvals structures, warned Aecom.
The construction industry in Northern Ireland has seen the value of output rise by 11.6% in value terms compared to the previous 12 months. The review predicted that 2018 is set to be another stable year for the industry in Northern Ireland.