Glenn Hanna, associate director of AECOM Cork, previewed their forecast for the Irish construction sector. He is optimistic that 2022 will be as stable as last year.
“Overall, we in the sector are feeling hopeful, albeit with some nervousness. Hopefully, there will be no further lockdowns resulting in construction site closures and, unlike the last two years, the industry will have a full 12 months of activity.”
“If that is the case, we expect the value of construction output to grow by 18.5% this year, from €27bn to €32bn. This is just €6bn short of levels recorded at the unsustainable height of the Celtic Tiger. However, when inflation is accounted for, the volume of output remains significantly behind what it was 15 years ago, evidenced by employment figures and annual housing completions,” he said.
Strong investment in the pharmaceutical, medical devices, and data centre sector also look set to drive increased activity over the next 12 months.
In addition, “2022 and the coming years will also see an increasing prioritisation of projects aimed at achieving carbon neutrality and promoting sustainability across the industry.”
When it comes to housing, AECOM believes the sector, driven by strong public expenditure, is on track to significantly increase completions this year and should exceed the government’s ‘Housing For All’ target of 24,000 units, coming off the back of 32,000 commencements in 2021.
Cost and tender-price increases in 2021 saw many residential projects come close to the viability tipping point. The industry must return to more balanced increases this year to prevent this from continuing to be the case.
The supply of labour is also going to continue to challenge the sector, and if it is not addressed, will be hard to meet demand.
Hanna acknowledged that there is huge pressure on the construction sector to expand, meet targets, and deliver on housing and infrastructure.
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