Republic of Ireland market intelligence: opportunities for residential, despite key market challenges
Philip Matthews
Managing Director, Ireland
Ireland’s construction industry remains stable despite being tested by several key challenges. The shortage of a skilled workforce, rising costs and uncertainties in project timelines and contracts are causing issues for many contractors. There are signs of forward momentum, however, with opportunities in the residential sector.
Concerns over a cooling market
Our latest report indicates that, on balance, contractors believe that the construction market is weakening, with 48.1 percent of respondents indicating the market is ‘staying the same’ and 40.7 percent suggesting that it is ‘cooling’, while 11.1 percent perceive a ‘warming’ in the market.
While the market is slowly recovering, there are still moderate increases. The latest Tender Price Index for Ireland, released in February this year, shows tender prices increasing by 1.5 percent, while the perception of contractors surveyed expect tender price inflation to be more than double at 3.6 percent in 2024.
There is considerable competition in both main and subcontract works, and despite labour shortages, too many contractors are competing for the same work. There are also concerns surrounding increased costs and fixed-price contracts.
Positive signs of forward momentum
The Irish construction industry in Q1 2024 is showing resilience despite the challenging landscape of skilled labour shortages, rising costs, and uncertainties in project timelines and contracts. Analysis of the contractors’ response reveals housing to be the top-performing sector, with public housing performing most strongly. The residential sector industry is experiencing opportunities, with a marked switch from Private Rented Sector to publicly funded schemes.
Private commercial opportunities remain active around healthcare, sustainability, IT/data, and tech-based companies. There are also significant opportunities in the infrastructure sector as large-scale expenditure on national infrastructure projects continues in Ireland, as part of the National Development Plan.
Improvements in sustainability
Half of all respondents confirmed that 25 percent or less of their current projects have a ‘significant commitment’ towards net-zero carbon. While still low, this is a marked improvement since our last survey (63 percent).
At an operational level, respondents reported investing in offsite and other modern methods of construction to develop their offering in the market, while driving productivity and efficiency. Similarly, contractors are investing in a range of sustainability programmes and measures, including software packages to track emissions and improve their carbon footprint.