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The CIF has warned that the decision to increase wages by 2.7% per annum for the next two years will put pressure on regional construction companies still in recovery mode.
“The reality in regional Ireland is that there is not enough activity to sustain construction companies in those areas. We have consistently highlighted the disparity in activity between the Greater Dublin Area and the rest of Ireland. Our regional contractors and housebuilders are reporting low levels of activity in the regions already. This wage increase will put more pressure on these companies making the delivery of essential housebuilding, infrastructure delivery and job creation in the regions even more parlous.
Balanced regional development and growth in regional cities and towns is fundamental to the delivery of Project 2040 and the creation of a sustainable Irish economy. We are again warning that without strong construction companies operating in the regions, Project 2040 is under threat. For example, housebuilding in the regions is still very subdued even in areas where there is viable demand. Increases in costs, such as wages, can make it more difficult to secure development finance for housing development at a time when the cost of housebuilding still surpasses the cost of existing stock in many places outside the GDA.
We are working with Government to address blockages to the delivery of essential construction in areas such as public sector procurement, finance availability, planning and infrastructure but everything must be done to avoid upward pressure on construction costs to ensure construction is viable across the entire country.”
Tom Parlon, Director General, CIF