The Irish Construction industry continues its sustained recovery and 2017 should see it continue on a growth trajectory to address the many deficits in all sectors which arose during the deep recession.
Our Construction Opportunities Report for 2017 provides clear evidence of this upward momentum in the industry and shows signs of activity spreading beyond the Dublin and Leinster regions.
The Report contains 519 projects totalling almost €19 billion across all sectors and regions, which have recently been submitted, are approved, due to commence, are progressing through the construction cycle or will be nearing completion in 2017 I would like to express my sincere appreciation to our contributors;
- Simon Coveney T.D.:
Minister for Housing, Planning, Community and Local Government
- Minister Chris Hazzard:
Minister for Infrastructure of Northern Ireland
- Tom Parlon:
Director General of the Construction Industry Federation
- Phelim Devine:
Design Director and Deputy Project Director, National Paediatric Hospital Development Board
- Hannah Dwyer:
Associate Director and Head of Research of JLL
- Austin Hughes:
Economist, KBC Bank Ireland Richard Ramsey: Chief Economist, Ulster Bank
– Northern Ireland
The CIS 2017 Annual Report, illustrates the significant amount of construction activity which will occur in 2017 and beyond and I would like to give you a brief overview of some of the major developments in each sector:
The Government’s commitment to the Civil sector continues into 2017 with plans progressing on a number of major road schemes. Work is currently ongoing on three major road schemes in Ireland (N25, New Ross Bypass, M11 Enniscorthy and N17/N18 Gort to Tuam) with a combined value of €1.225bn. Plans will progress during 2017 on three other road schemes (N6 Galway City Bypass, N22 Macroom Bypass and M7 Naas) with a combined value of €770m. This illustrates the considerable investment in Ireland’s roads is forecasted for 2017.
Irish Water’s delivery of their business plan will involve a €5.5bn investment in capital spending on drinking water, wastewater quality, capacity and new infrastructure up to 2021. A substantial amount of this is expected to be invested in 2017. Major schemes to go ahead in 2017 are €200m Vartry in Wicklow and €300m Poolbeg Water treatment Plant.
The Dublin Airport Authority hopes to commence work on the new North runway and taxiways at Dublin airport during 2017. It will cost €320 million and is expected to be delivered in 2020, with an estimated 1,200 jobs set to be supported during the development. The €227m redevelopment of Alexandra Basin will transform Dublin Port's infrastructure and enable it to service the economy for decades ahead.
It is estimated that there is a requirement of approximately 6,000 new hotel bedrooms in Dublin City to ensure that the supply constraint does not affect Dublin tourism. In 2017 we expect to see a number of new hotel developments to go On-Site along with many major hotel extensions. Dublin also sees a significant shortage of student accommodation across the capital. Almost 6,000 beds for students are in the pipeline for Dublin city with more than 2,000 places already under construction in purpose-built student blocks.
Sport & Community Sector
With the recent announcement of the IRFU’s bid to host the Rugby World Cup in 2023, 2017 will see plans develop for the upgrade and redevelopment of targeted stadia throughout the country. Construction work is entering its final stages on the redevelopment of Páirc Uí Chaoimh and plans are also progressing significantly on the new stadium at Casement Park, Belfast. Elsewhere work is expected to commence during 2017 on both the redevelopment of the RDS and The Curragh Racecourse.
Construction of the Center Parcs Holiday Resort in Ballymahon, County Longford, estimated at €233 million, will start next spring with the opening in 2019. The venture will involve 750 jobs at the construction phase and 1,000 full-time jobs when up and running.
The Dublin Docklands area of the city remains the hub for activity within this sector, with somewhere in the region of 20 cranes currently On-Site and over €1 billion euro worth of schemes planned. Further commercial projects are in the pipeline for the area, with significant projects currently awaiting planning approval. Elsewhere, Sandyford in South County Dublin is expected to witness a rise in construction activity in this sector in the coming year.
The continued provision of high quality Grade A office accommodation is vital for the sector with investors and large multinationals viewing Ireland as an attractive proposition for expansion or relocation on the back of Brexit.
2017 is looking very bright for the Medical sector. The main works are expected to get underway on the long awaited New Children’s Hospital at the St. James’s Hospital site in Dublin. This development represents an investment of approximately €750m and will be a world class facility. Also in the Medical sector, main works are expected to commence in early 2017 on a new €64m extension at the Bon Secours Hospital in Co. Cork. Works to include the construction of a 6 storey extension to the rear of the campus. It is estimated this building project will create work for 200 construction jobs with a further 75 clinical jobs to be created when the facility becomes operational.
Looking towards the year ahead, the Education sector also looks set for continued growth. The €200m Grangegorman development is expected to commence On-Site in Spring 2017. The key elements of this development include the construction of two quads – the Central and Eastern. Also in the Education sector, there are several major school developments expected to get underway in 2017, such as a €15m post primary school development in Dundalk, Co. Louth and a €30m school development on the Maynooth Campus in Co. Kildare. The remaining elements of the School Summer Works Scheme 2016/2017 are expected to get underway during the summer holidays and also the minor works scheme which includes minor refurbishment works to over 3,000 schools nationwide.
The Residential sector experienced a steady growth of activity in 2016. There were some promising signs in the trends that occurred throughout the year which paves the way for a cautiously optimistic outlook for 2017. According to our data, we estimate that the number of new residential dwellings commencing On-Site will approximately be 16,000 by the year end. 2017 will be roughly on par with the output of 2016. Prevailing circumstances will halt any exponential growth in the sector but new builds should remain strong.
Some notable issues for the Residential sector in the next 12 months include; the fast tracking of developments of 100 units or more through An Bord Pleanála. The new legislation will be in place for three years once passed by the Dáil in the New Year. Social housing will play a significant role in residential builds for the next 5 years. The Department of Housing plan to spend €5.5 billion on social and affordable housing to deliver up to 47,000 new units by 2021. Also, the instalment of the local infrastructure housing activation fund of €200 million to create infrastructure to allow up to 15,000-20,000 new homes to go On-Site should be in place in 2017.
In the Industrial sector for 2016, foreign direct investment (FDI) played a vital role in the sector’s activity. Data Centres make up a large element of the sector’s builds. A number of the most prominent online companies were involved in Data Centres in Ireland throughout 2016 including Microsoft, Amazon, Facebook, and Apple. While FDI has been the driving force behind the industrial sector's strength in 2016, global uncertainty as we enter 2017 is a cause for hesitation. The Brexit result in the United Kingdom and the United States’ transition to a new presidency could lead to a slowdown of activity as the markets adjust to the potential change in international trading agreements.
The major scheme for the sector in 2017 will be Apple’s €850 million Data Centre in Athenry, Co Galway. The development has been delayed due to a High Court appeal on An Bord Pleanála’s decision to grant planning permission to the company in August 2016. The appeal will be fast tracked and a decision is expected to be made on the project in April 2017. If Apple are successful, works are expected to commence on the development in May 2017.
Finally, I am confident that over the next number of years, based on the level of activity we see from our researched data, the construction industry will once again be a main pillar of the Irish economy.
Article taken from CIS Construction Opportunities 2017 Report