Sustaining Growth – AECOM Ireland Annual Review 2018

01 Feb 2018

While some big issues remain for Ireland’s construction industry, from Brexit and its potential impact on new construction project demand to the availability of resources and tender inflation, the future looks positive.

So, what trends shaped the industry in 2017 and what challenges, risks and opportunities lie ahead for Ireland’s economic and construction output in 2018?

The value of construction output across the Republic of Ireland (ROI) rose by circa 18 per cent in 2017 and is expected to increase by 14 per cent to approximately €19.5 billion in 2018. Twenty seventeen saw increased construction activity extending beyond the Greater Dublin Area.

The growth in construction output in the ROI has been focused on the commercial and Foreign Direct Investment (FDI) sectors. Infrastructure continues to lag behind. The residential sector and transportation and utilities infrastructure have not kept up with the demands of a growing economy.

There are plans and initiatives in place to address Ireland’s infrastructure shortcomings; however it is hard to identify which projects, due for completion in 2018, are going to significantly alleviate immediate pressures.

It is very positive that there is an 18.5 per cent increase in value terms in the public sector capital programme budgeted for 2018. There is a concern around the delivery of this significant increase. Do the various government departments have the shovel-ready projects available to implement the planned increase in public capital spending in 2018? 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.

The Republic of Ireland Draft National Planning Framework sets out the need for Metropolitan Area Strategic Plans for the five cities. These five Plans will go across local authority boundaries. The recent success of the Dublin Docklands Strategic Development Zone shows that where demand exists, developers can respond quickly. But to achieve similar success in the vital residential sector, suitable statutory processes and advanced physical infrastructure across utilities and transportation are needed.

For our 2018 Annual Review, we have surveyed clients, consultants and contractors from across Ireland’s construction industry to identify trends in innovation, technology, sustainability and regulations and anticipated business activity and industry challenges. While the majority of respondents report that they are very positive about 2018, with 61 per cent anticipating an increase in business, they also anticipate that resources, tender prices and statutory consents will be the biggest challenges to construction projects in 2018.

The challenges faced by the construction industry today reflect the continued growth of the Irish economy itself. This can only be a good thing if harnessed. AECOM is looking forward to playing an important and influential role at the centre of this ongoing growth.

John O’Regan Head of Buildings + Places, AECOM ROI

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