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Turnover and employment continue to rise in construction: CIF Construction Outlook Q2 Survey.
Survey finds that almost half of companies not undertaking public works projects due to low margins and bureaucracy
Turnover and employment continue to rise in the construction sector according to the Construction Industry Federation Q2 Construction Outlook Survey, released today.
26% of companies acknowledged an increase in turnover year on year in Q1 with 34% expecting turnover to continue to increase in Q2. 20% of respondents reported an increase in the total number of people they employ, with 23% expecting the trend to persist into Q2.
The survey also found that 48% of construction companies had no involvement in public works projects citing low margins (15%), too much bureaucracy (13%) and lowest price award criteria (12%) as the three biggest deterrents. Another factor was a lack of a mechanism for engagement pre-tender to mitigate risk.
Cost increases continue to impact the sector with 68% reporting a year-on-year increase in the cost of raw materials and 60% anticipating the trend to continue in the next three months. 65% experienced a year-on-year increase in the cost of labour, with 50% expecting the trend to continue. Access to skilled labour (74%), securing a healthy profit margin (62%) and the increased cost of raw materials (62%) remain the three most prevalent challenges facing the construction industry heading into Q2.
Hubert Fitzpatrick, Director General of the Construction Industry Federation said:
“These latest findings illustrate that the health and agility of the construction sector is being maintained with continued growth across turnover and employment.
“Following the announcement of a €13 billion investment in public capital projects planned in 2024, and new legislation recently published providing for the establishment of the Future Ireland Fund and the Infrastructure, Climate and Nature Fund, the construction industry is hopeful that the investment momentum in critical infrastructure will overcome the current challenges to delivery.
“As with many business sectors, attracting new entrants to the workforce is a challenge in the current labour environment. The industry is confident that it can respond to market needs and its workforce is growing. Between 2019 and 2022, during the Covid pandemic, the numbers employed in construction grew by 20,000 people. More and more people are realising the attractiveness of working in a sector with a rising demand and we expect this to continue as positive policy and sector recruitment initiatives are rolled out. The industry is working closely with Government on its careers action plan to seek new entrants and we’re looking forward to working with the new Minister to continue the good work previously done by the new Taoiseach.”
The survey of 250 construction companies carried out between 2nd to 10th April found that:
- 26% acknowledge an increase in turnover year-on-year in Q1, with 34% expecting turnover to continue to increase in Q2.
- 20% report an increase in the total number of people they employ, with 23% expecting the trend to persist in Q2.
- 65% experienced a year-on-year increase in the cost of labour with 50% expecting the trend to continue.
- 68% report a year-on-year increase in the cost of raw materials with 60% anticipating the trend to continue in the next three months.
- Increasing costs continue to impact the pricing of projects with 54% acknowledging a year-on-year increase and 44% expecting continued increases in Q2.
- Access to skilled labour (74%), securing a healthy profit margin (62%) and the increased cost of raw materials (62%) remain the three most prevalent challenges facing the construction industry.
- 48% of all companies had no involvement in public works contracts in Q1 with 44% having no planned involvement in Q2.
-ENDS-
*Hubert Fitzpatrick is available for interview*
For further information contact:
Meabh Smith
CIF Communications Director
0871338978