Report Signals Irish Housing Boom Amidst European Construction Decline
Irish housing activity is poised to outperform construction levels across Europe in the coming year, according to recent analysis by Euroconstruct, a construction tracking group covering 19 European countries. The study indicates a 12% growth forecast for Ireland’s residential sector in 2023 and 2024, contrasting with a 15% decline in new residential construction across Europe during the same period. EY Ireland, a member of Euroconstruct, contributed to the research. The report anticipates a robust construction sector in Ireland, particularly in residential and civil engineering, with an expected 31,000 new housing completions in 2023 and 33,450 in the following year.
Euroconstruct’s comprehensive research encompasses residential, commercial, and civil engineering projects, including transport, energy, and water infrastructure. The broader Irish construction sector is predicted to grow by 3.2% this year, outpacing other European nations. In contrast, Europe’s total construction activity is expected to decrease by 1.7% in 2023 due to macroeconomic uncertainties, rising interest rates, and tightened credit conditions. Looking ahead, Euroconstruct forecasts a 4.4% growth in Ireland’s construction sector in 2024, surpassing the continent’s anticipated 2.1% growth.
The report also highlights growth projections for the Irish civil engineering industry, estimating a 2.4% increase in 2023 and a further 5.3% in 2024. The non-residential sector’s output is expected to grow by 2.9% and 2.6% over the same period. The establishment of the Infrastructure, Climate, and Nature Fund as part of Budget 2024 is seen as a positive move to sustain construction activity in the face of financial constraints. However, concerns linger, including rising interest rates, capital costs, and ongoing skills shortages, potentially limiting the construction sector’s growth beyond 2024.
Euroconstruct’s research points out that 13 European countries are likely to experience a decline in construction output in the coming year, with housing completions dropping across most markets. Looking ahead to 2025, the report forecasts a decline in housing completions across the 19 countries to 1.51 million units, the lowest since 2016 and significantly below the 2.61 million units recorded in 2007. While the civil engineering sector is projected to expand from 2023 to 2026 in Europe, driven by public investment in infrastructure, the non-residential market is expected to be the weakest across 2023 and 2024 before showing modest growth in 2025.
