Paul Sheridan is the Construction Industry Federation’s Director of Main Contracting
The outlook for 2025 is generally positive in terms of construction activity. However, growth in civil engineering remains a concern.
The government has a major role to play in ensuring that the necessary conditions to support construction activity next year and many years into the future are put in place.
The biggest strategic challenge to future growth across construction and the broader economy is the delivery of vital infrastructure, particularly water and energy.
While both Uisce Éireann and ESB Networks share the same malaise of the Irish planning system, unfortunately Uisce Éireann is very much hamstrung because it cannot raise its own funds. It must rely on a convoluted bureaucratic system to access funding from government.
There is a real fear now that the €1billion announced by the government for water and waste-water infrastructure will not be used to deliver new pipes in the ground.
This is quite disappointing given that the lack of water capacity is a key reason for undermining planning permissions for housing. Unless this is addressed the housing targets are impossible.
The government promised the members of the Water Services Operators Group that Uisce Éireann would ramp up its infrastructure delivery.
On the back of this and having invested in skilled people, equipment, plant and facilities they are learning that Uisce Éireann is in fact de escalating its activities at the time when it needs to ramp up.
While hundreds of millions of shovel ready projects sit on bulging shelves, these contractors are now leaving these shores in search of work and are duly chastened by their experience.
There are other serious risks related to this underinvestment, which will be felt by other sectors of the construction industry, particularly in relation to both FDI and domestic economic activity.
Any talk that providing additional capital funds to Uisce Éireann would lead to overheating the economy is erroneous and lacks any sense of strategic thinking. There are approximately 6,500 skilled employees in the contracting water infrastructure sector spread across Ireland.
This is hardly enough to overheat an economy suffering from a drastic infrastructural deficit. It is macroeconomic dogma that capital investment in infrastructure always leads to positive returns for the state.
The government must recognise the difference between providing loan facilities and operational funding to Uisce Éireann as a going concern, and its ability to construct new infrastructure.
Funding water infrastructure is the same as building houses.
While a lack of water infrastructure is the overriding risk to our industry and the broader economy there are also other factors that could enable construction activity such as the accelerated reform of public procurement and contracts.
The CIF has published its new Strategy for the Improved Delivery of Public Infrastructure available on the CIF’s contracting resource at www.cif.ie/ contracting-resource-hub.
There are some positives such as the new Construction SEO, which is critical to maintaining stability in the industry.
The SEOs provide strong incentives to attract talent in the sector and maintain industrial peace. Furthermore, by showcasing construction innovation and technological transformation in how we build major projects will be a key attraction to new and diverse talent.
The recent implementation of ARM5 will also support sustainability and life cycle assessments, while giving contractors some relief in the measurement and pricing of design liability in their tenders.
Overall then, the industry is well placed to thrive, provided government acts and puts in place the conditions for it to do so.
