Outgoing CIF President Dominic Doheny reflects on the highlights of his two years in office and looks ahead to the future of the industry, reflecting on his hopes for it and the challenges that may be in store
With a career spanning more than three decades in the Irish construction industry, Dominic Doheny has brought a wealth of knowledge and experience to the role of CIF President over the past two years.
He has been the joint Managing Director of John Flanagan Developments since 1989, is the former Chairman of the Irish Home Builders’ Association and can now add a very fruitful, diligent and energised term as CIF President to his lengthy CV.
“It was a massive honour for me to take the helm as CIF President over the last two years,” Dominic Doheny says as we settled into his office in Tullamore for our interview. True to form, Dominic Doheny is very punctual, (our interview begins three minutes early in fact), and with a schedule as busy as his – often commuting between Tullamore and Dublin several times a week for CIF and other commitments, while also holding the fort at John Flanagan Developments – it’s not hard to see why time is at a premium. “I was genuinely taken aback by the amount of respect the members have for the office of CIF President,” Dominic Doheny reveals. “It put a bit more weight on my shoulders than I had anticipated, but I very much appreciated it and respected the trust they placed in me to fulfil the obligations of President during my term. Members had high expectations, and I was proud to work on their behalf to meet them.”
One particular highlight of his presidency, according to Dominic, was the establishment of the Construction Sector Group (CSG).
“The formation of the Construction Sector Group had been a key objective of the industry for some time, and I made it a personal objective when I took office to get it across the line,” he recalls. “I was delighted to have the opportunity to put the arguments and rationale behind the CSG to the then Housing Minister Simon Coveney at a social dinner in Cork one evening early on in my presidency, and I mentioned it again in my speech later that evening. It was a great moment when the Government announced in the Project Ireland 2040 plan that it would be establishing the Construction Sector Group. We’ve only had one meeting so far, so it’s too early for me to comment on how effective it’s going to be, but I am very optimistic and see great potential for a more collaborative, cohesive and shared approach to construction in the future from both Government and industry alike.
“Our industry has been particularly challenged in our interactions with Government over the last number of years, and it is time for that to change now, and I am optimistic that it is changing,” he adds. “We don’t have a single line minister for the construction sector. So, we often have to visit up to six different ministers to discuss topics relating to construction, and that is one issue we very much hope to resolve through the CSG. We must keep a focus on the core issues too, as it’s easy with so many side issues to become distracted. The CSG will require careful management and direction to maintain focus, but the fact that the Government has bought into the principle of the CSG is a success in itself and makes me very hopeful that it will deliver for our industry into the future.”
Another highlight during Dominic Doheny’s presidency was the announcement of the Help to Buy scheme.
“The announcement of the Help to Buy scheme was a huge boost in confidence for the industry, and it was absolutely necessary to help people get onto the property ladder. However, it is due to expire at the end of 2019. A lot of our members will be making plans for 2020 shortly, so we hope that the Government announces an extension to the scheme in the near future.”
Throughout his term as CIF President, Dominic Doheny has witnessed the announcements of Ireland 2040, the National Development Plan (NDP), and the National Planning Framework, which are hoped to represent a new, more positive era for the construction industry and Ireland generally.
“These initiatives represent €116bn in investment,” Dominic Doheny notes. “That is very significant, but delivery will be key. This investment has to be delivered in a phased way, in a structured way, with no peaks and troughs. We are trying to remove the boom and bust cycles, which have been a problem for the industry in the past. We don’t want it all to be back-ended, or it will end up taking years.”
This measured roll-out is essential for a number of reasons according to the outgoing President.
“Civil engineering companies need certainty if they are to invest in plant and machinery,” he says. “There is also the challenge of trying to attract people back into the industry who may have left the country and found work abroad. These individuals need to have confidence that the NDP is going to be delivered. If you are going to uproot yourself and possibly your family too, all over again, and make the journey back home, you need to know that you are coming back to something that is sustainable for at least five or 10 years. You need that peace of mind, it’s only human, and it’s only right we should be able to give that to workers.”
BALANCED REGIONAL DEVELOPMENT
Another challenge that continues to concern Dominic Doheny is the fact that the unbalanced nature of Ireland’s economic recovery has meant that many companies have yet to experience any real increase in growth, or return to sustainable business levels, particularly those in regionally-based member companies.
“Dublin is enjoying strong growth. Cork is doing quite well. Limerick is starting to see increased activity, and Galway is also beginning to show signs as well,” Dominic Doheny explains. “But many of the rest of the regions are not performing at all. In regional areas, Government spending is mainly on education, justice, health and so on. Any construction tends to be on small projects, with a large number of contractors competing for them, and there are quite often no private jobs in the area.”
This paucity of private activity, particularly with regard to housing in regional areas, comes down to simple economics according to Dominic Doheny.
“It doesn’t pass the viability test,” he points out. “The replacement cost of buildings is still way above their market value. It’s the same for all sectors. We won’t cross that viability line for another 12 months or so, that’s one of the reasons why it is vital to extend the Help to Buy scheme.”
Dominic Doheny firmly believes that the NDP will play a pivotal role in rebalancing this situation.
“It does attempt to balance the growth,” he explains. “This is a considerable challenge. You can’t really tell people where to live. The Government has a huge task in front of it in increasing the spread of investment into other cities and regions. The majority of our members have work in Dublin, and they are travelling long distances into Dublin every day. But this is not sustainable economically or socially, not for their families or communities. It’s not good for anyone to spend so much time commuting.
“The Government understands this I believe – the fact that activity in Dublin is positive but needs to be controlled – and in fairness to the Government, this is recognised in the Ireland 2040 plan. So, we don’t need more new plans or policies; we just need the implementation of the ones we have.”
Dominic Doheny is dubious about looking too broadly at the current state of the construction industry, keenly aware that the bigger picture does not reflect the reality on the ground for many CIF member companies.
“We have increased in scale and output, there is more activity and more employment, but are our members in a better place individually? It’s questionable. Our profit margins here in Ireland average around 1 to 1.5% and that is just not sustainable. A lot of members are having to tender below cost to get work, which is a real problem. We did a survey of the top 20 contractors in Ireland, the UK and Mainland Europe. In the UK, the margins ranged from 1 to 1.5% at the very bottom, up to 5%. In Europe, the margins ranged from 10 to 15%.”
This lack of profitability has quite profound effects on the industry and its ability/speed in terms of recovery,” according to Dominic Doheny.
“It means we can’t afford to invest in innovation, as we just don’t have the profits. We are looking for the establishment of a body like Teagasc for the industry. A body to carry out innovation on behalf of the industry,” he explains. “When you see farmers planting new grasses or employing new methods to generate higher milk or crop yields, it’s usually as a result of work done by Teagasc. The farmers don’t put their hands in their pockets, they can’t afford to.”
An example of the innovation Dominic Doheny points to is investment in offsite construction. “We need more investment in offsite construction and other innovative solutions; innovation that will help us increase productivity, reduce costs and attract people into the industry or indeed back into the industry. It will also help us to increase our exports to other countries, which would help to protect the industry from any cyclical economic surges or troughs and make it more sustainable overall. But we can’t do this in isolation, we need the Government at the table as well.”
Dominic Doheny is confident that the outlook for the industry is increasingly positive.
“When you look at the macroenvironment, the figures from the Central Bank and the ESRI point to good, strong growth for Ireland,” he says. “We don’t need outlandish or unsustainable figures. We want a level, steady pace. The forecasts are good, but we always have to be aware of external issues such as Brexit, trade wars and so on. At the moment all the indicators are positive, and that must be appreciated. However, there are still challenges. Inflation in materials and labour is one. So, we have to be careful not to push ourselves off a cliff.”
Other issues also weigh heavy on Dominic Doheny’s mind, particularly those that impact majorly on the construction industry’s strong SME contingent.
“The impact of the economic downturn was particularly felt among the many SME businesses that operate in the construction sector and beyond,” he adds.
“The industry needs the right conditions for its supply chains to thrive and be confident about investing in new research, innovation, technology and people. The construction industry has previously called on Government to assist in developing a strong and resilient supply chain by creating conditions for construction supply chains to thrive, including addressing access to finance, education and skills, and leaner procurement.”
Skills represent another challenge. “We need to have a plan around training, but training that is relevant,” Dominic Doheny says. “We need to bring in new skills. We need to look at new ways of building and training people for that. We also need to get out there into the schools and inform careers teachers of the benefits of a construction career. The skills are transportable into any country in the world, but we need a sustainable industry here in Ireland as well.”
Dominic Doheny laments the fact that figures for individuals signing up for apprenticeships continue to be poor.
“In the schools, the sole focus seems to be on the percentage of their students who go on to third level education. That needs to change. We all envy the German model, but the career path offered by an apprenticeship here is very good as well. Some of the best mechanical and electrical engineers in the industry started out as apprentices.”
From a personal point of view, Dominic is looking forward to “winding down slightly”, but anyone who has come to know the dynamic Tullamore native will be aware that his undeniable, natural work ethic will ensure it is only a very slight wind-down.
“It’s been an incredible rollercoaster of a journey over the past two years,” he says. “It’s been an extremely busy time, but I am very lucky to have a very supportive wife and family and work colleagues. The presidency sucked up a lot of private time, and I have to admit I’m looking forward to getting that time back.”
This does not, however, mean that Dominic Doheny will be disappearing off the scene entirely. “I hope that CIF is in a better place now than it was at the beginning of my presidency and that I lived up to members’ expectations,” he says. “I’ll still be there for the members, I will still be on the executive, and I hope to bring the extra layer of knowledge and experience that I have gained over the last two years to bear in the coming years.
“I am intensely proud of the Irish construction industry and its achievements,” Dominic Doheny concludes. “When we look at world-class buildings like the Bord Gais Energy Theatre, the Convention Centre Dublin, the Aviva Stadium, and advanced manufacturing facilities up and down the country, all built by Irish companies and Irish construction workers, you cannot be anything but very proud and feel very lucky to work in this industry. Often, I feel the industry doesn’t get enough credit for its major achievements and its inherent ability to adapt, time and time again. Our industry is hugely creative, industrious and resilient. Every day, we are quite literally building the future, and that is endlessly exciting. Who wouldn’t be proud to work in an industry like that?”