Last year, an 18% growth in Irish construction output was recorded with a further 15% projected for 2017, according to Linesight, the Irish provider of professional services and strategic support to the Global construction industry.
The predicted output level for 2017, at just under €17 billion, a 15% increase over 2016 which represents 7.5% of GNP.
This is still well below the recognised European sustainable level of between 10 to 12%. When these European benchmarks are applied to current GNP levels there is still capacity in the industry to achieve sustainable output between €23 and €27 billion.
The predictions were made as Linesight launched the 2017 Linesight Ireland Handbook which provides a review of the Irish construction market and an outlook for 2017 including topics such as economic activity, indices of construction costs, trends in construction output and labour costs.
According to the report, the residential sector while showing signs of recovery, still needs to increase output over the coming years. Government initiatives, the increasing viability of residential construction and the easing of funding restrictions are leading to improvements.
Furthermore, buoyant economic activity is reshaping Dublin’s business district as Ireland becomes home to world leading business giants that continue to expand and invest here.
Linesight has seen commercial office space and fit-outs in the greater Dublin area booming in the past year and extending out to other major urban centres. Hospitality and retail activities are increasing while the IDA continues to attract prestigious multinationals to invest in Ireland particularly in data centres and life sciences.
However, there are external influences which could impact the recovery of the industry according to the report. A wave of geopolitical uncertainty hit in 2016 with decisions looking set to shape the global economy over the coming years.
Brexit and the US presidential election dominated international media over the last year and is expected to continue for the foreseeable future. Fundamentally, both have created uncertainty, which is likely to negatively impact GDP for a number of economies, warns Linesight.
Speaking this week, Managing Director of Linesight Ireland, Richard Joyce said, "We have seen a heartening increase in the levels of employment in the last three years, coming from a very low base in 2012 / 2013, along with sectoral expansion and continued investments in the industry. However skills shortages, in both specialist and traditional trades, continue to impact tender levels and construction inflation."
Source: www.businessworld.ie
