Construction BUSINESS

DKM report shows that industry can grow on average by 9% per year up to 2020 but warns of potential skills shortages

A report, commissioned by the Construction Industry Federation and carried out by DKM consultants in conjunction with SOLAS, states that construction activity could potentially generate a requirement for 112,000 jobs up to 2020.

Director General of the CIF, Tom Parlon stated at a launch in Construction House today,

“Over the next 3 years, this report estimates that we will need 112,000 additional workers in construction to deliver on the ambitious targets set out in the Government’s €43billion Capital Programme, the Rebuilding Ireland Strategy and in meeting the increasing demand from Foreign Direct Investment companies for specialist buildings.

The potential prize for delivering on these strategies is huge in terms of economic growth, jobs and recovery in the regions. With a forecast of 9% annual growth on average the construction can become a €20billion industry by 2020. It can potentially employ 213,000 direct employees making it the largest generator of jobs in all communities around the economy. It is forecast to contribute around 10% of GNP to the Irish economy.

The construction industry is generally in recovery since 2013 but it is still grappling with nearly a decade of underinvestment and is playing catch up with an economy that has expanded strongly in the meantime. This has manifest itself in the acute housing supply shortage and infrastructure deficits across the country.

This report sets out the required number of employees and apprentices to sustain desired activity levels as set down by Government policy. We will continue to work with the Government and its agencies such as SOLAS and the Education and Training Boards to deliver skilled employees and apprentices through innovative initiatives. Critical will be getting the message to young people and those who have emigrated that there is a significant number of quality careers across all the trades and functions in construction companies.

DKM Director, Annette Hughes, who authored the report stated:

“The construction industry has been through an unprecedented period in its history – with the volume of construction output contracting by almost two-thirds between 2007 and 2012. It lost almost a quarter of firms in the industry in the six years to 2014. Although the industry has been recovery since early 2013, it needs to catch up with an economy that has expanded strongly.

In 2015 the value of turnover in the construction industry was around €13 billion, representing 6.2 per cent of economic activity (GNP), down from almost one-quarter of the economy at the height of the last boom. There were 136,900 persons directly employed in Q2 2016, 6.8 per cent of the total employed workforce.

The severity of the construction recession saw the numbers working in construction decline by almost 180,000 by Q1 2013 to just 35 per cent of the numbers employed at the peak (2007). Construction recorded the fastest rate of employment growth in the period since, gaining 39,200 jobs at a rate of around 1,000 per month.

The industry is concerned that as activity ramps up quickly there will be a lag in the necessary skilled workers in the labour market and amongst those coming out of full-time education and training to meet the demand over the medium-term.”

CIF President Michael Stone said:

“The construction industry will be an engine for growth and job creation over the decade. Construction companies are delivering high quality projects domestically and internationally and have never offered better opportunities for people to work and build careers.

We as an industry are focussing on dramatically increasing the number of apprentices in the industry. There were only 4,400 apprentices across all trades in construction in 2015 compared with 23,700 apprentices in Q4 2007. This year so far there were around 1,500 new registrations and this report indicates that we need to reach an annual level of registrations of around 4,000 to sustain forecast activity.

We are seeking to establish a Construction Skills Forum involving relevant state agencies and Departments to monitor skills demand and to deliver initiatives to ensure there is an adequate supply of labour to deliver Ireland’s infrastructure, housing and built environment requirements.”