Republic of Ireland market intelligence: signs of stability
Philip Matthews
Managing Director, Ireland
The Irish construction industry has shown signs of stability in contrast to previous turbulent years. The pace of construction inflation has decelerated, and while interest rates remain relatively high, we have observed a levelling off. To navigate this plateau, robust demand in certain sectors continues to exert pressure on resources across the industry.
Recurring industry challenges
In Ireland the industry as a whole is facing the same intersecting challenges - skilled labour shortages, rising cost of construction and excessive lead times. The shortage of skilled labour has been a recurrent theme in recent years, but currently is being exacerbated by the demand for specific trades and skills in market areas that are seeing high demand, including data centres, life sciences and industrial.
Similarly, the rate of development in these sectors is putting strain on material supply chains.
The Building and Construction Index in the Republic of Ireland decreased by 3.4 percent on the quarter and decreased by 2.1 percent on the year as of Q2 2023, reflecting a cooling in new project starts.
While the commercial office market is in a downturn, with a slowdown of new-build developments and a change in the size and nature of fit-out works, conversely, the housing sector is in an upswing. This is propelled by various government-backed schemes aimed at stimulating housing delivery.
Sustainability is still not embedded
With sustainability and net zero high on the government’s agenda, we have introduced a section in our report to understand where, and to what extent, there is an impact of net-zero targets on projects.
The majority of those surveyed responded that they were only seeing significant commitments to net zero on less than 25 percent of projects.
The additional cost associated with sustainable measures is a restricting factor in a rising market is where viability of projects is a major issue
Thirteen percent reported that none of their projects had a significant net-zero commitment, citing high costs associated with additional certification and compliance standards with materials and construction techniques.