Positive signs for the Republic of Ireland construction market

Mark Kelly

Managing Director, Ireland

The construction sector in the Republic of Ireland continues to experience increased levels of activity with the short and medium term outlook appearing positive. Results from our latest Republic of Ireland market intelligence survey echo this sentiment with a majority (77.8 percent) of contractors surveyed expecting the Irish market to warm in the short to medium future.

According to surveyed contractors the market in the Republic of Ireland is still very competitive, but with a good steady supply of tender opportunities coming through contractors are keeping their order books filled for the early part of 2019 and beyond.

Mixed sector performance

Current order books are on average 83 percent full, indicating a very healthy short term outlook. The sectors performing notably well are residential/housing, commercial/office and the public sector. Infrastructure generally continues to show very low levels of activity, with many of the projects expected to begin only now at the early planning stage; activity in this sector is expected to increase in the short to medium term.

Margins, however, remain tight although they have shown a slight improvement to 4.1 percent in the current report. Rising labour and material costs continue to be a significant challenge with mechanical, electrical and façade contractors experiencing upward pressures on labour and material costs.

Competitive tendering conditions

Tendering conditions remain competitive but in a market with continued rising costs. Contractors expect average tender price inflation to reach 7.0 percent in 2019 following on from a 7.6 percent rise during 2018. These rises are very similar to the tender index increases as published by the Society of Chartered Surveyors in Ireland (SCSI).

Brexit continues to be a major concern with Irish contractors, with the ongoing uncertainty putting upward pressure on materials in particular. Depending on the outcome this will be a key challenge in 2019 and beyond.

Build to Rent: hitting the sweet spot

This edition also includes an insight paper on the growing Private Rental Scheme/Build to rent sector in Ireland outlining some of the key issues which must be considered to deliver a viable and sustainable rental community. 

Download the report to read more about these challenges and see the full analysis and insight from the survey.