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Turnover and employment continue to increase across the construction sector, according to the Construction Industry Federation’s Quarter 1 Outlook Survey.
The cost of labour and raw materials continues to put upward pressure on pricing across all sub sectors, with 68% of survey respondents experiencing a year-on-year increase in the cost of labour and 60% experiencing a year-on-year increase in the cost of raw materials.
The survey examined projected turnover by sector in 2024. The survey results show that outside of companies that operate in housebuilding, there is a considerable spread in the type of construction projects that companies will deliver.
General building contractors’ portfolios are broadly spread across home building, commercial, industrial, health, education, office, agricultural and other – both new build and renovation. Civil engineering contractors’ portfolios are primarily spread across energy and water, transport infrastructure and roads – followed to a lesser degree by rail and telecommunications infrastructure. 80% of housebuilders sampled will be undertaking new build, as opposed to residential renovation projects.
Hubert Fitzpatrick, Director General of the Construction Industry Federation said:
“The results of this survey help to illustrate the agility within the construction sector in Ireland from its engagement in design and build, to the multi-disciplinary nature of its labour force.
“Overall construction investment in Ireland is forecast to increase by 4% in 2024. The residential, non-residential, and civil engineering sectors will continue to expand during 2024. With a growing policy emphasis on sustainable infrastructure development, the civil engineering sector will continue to be the backbone of the wider construction sector with strong growth forecast through to 2026.
“However, with the economy now at full employment, it is more important than ever that policy continues to address the significant capacity constraints and deliverability issues, principally those in the planning and procurement systems. Enabling the construction sector to be at its most effective will assist other parts of the economy to function more productively.
“We must also stress that a clear pipeline of key capital projects is vital to enable construction companies to plan and adapt their capacity to deliver much-needed infrastructure and to give confidence to the industry as it scales up to meet the infrastructure and housing needs of a growing population.
“While inflation is moderating, some construction products, whose production requires significant energy consumption like cement, concrete, GGBS concrete, steel and insultation, are seeing significant price increases despite the downward trend. It is essential that the Government avoids further interventions that could see further price increases in construction products, resulting in further increases in overall project costs.”
The survey of 240 construction companies found that:
• 39% acknowledge an increase in turnover YOY in Q4 with 33% expecting turnover to continue to increase in 2024.
• 26% report an increase in the total number of people they employ with 29% expecting the trend to increase over the next three months.
• 68% experienced a YOY increase in the cost of labour with 55% expecting the trend to persist in 2024.
• 60% report a YOY increase in the cost of raw materials with 57% anticipating the trend to continue into Q1 2024.
• Increasing costs continue to impact the pricing on projects with 52% acknowledging a YOY increase and 45% expecting continued increases in Q1 2024.
• Access to skilled labour (76%), securing a healthy profit margin (62%) and the increased cost of raw materials (53%) remain the three most significant challenges facing the construction industry.
For further information contact:
CIF Communications Director