Irish market view: a promising pipeline of work within the infrastructure sector
While the current situation for the construction industry in Ireland is one where production has fallen recently, we are much more confident about how the sector will fare in the more medium-term.
There is an incredibly large pipeline and, with the government enjoying a remarkable surplus, this is only likely to increase. However, for the moment, some of the fragility of the sector is due to inflation and a tight labour market, and if the government chooses to spend even greater sums, then this could trigger renewed inflationary problems. In particular, labour shortages will only become more pronounced.
In Q2, the number of people working in construction hit its highest level since the global financial crisis, and this was against a backdrop of falling construction production. If the industry starts to expand as it might, finding all the necessary workers will become a significant impeding factor. Much of the reason for optimism comes from the infrastructure industry.
While the residential and non-residential sectors are seeing production fall, civil engineering has grown strongly over the first half of the year. Recognising some of the challenges this presents, the government has put in place new rules for major projects. Greater scrutiny for such schemes, across the planning and business case process is set to create barriers and, in order to successfully deliver them, clients will need to work with experienced, trusted partners, capable of providing a full service offering.
