Ambition building: Construction Industry Federation Annual Report

by | Dec 21, 2023

Following the release of the CIF’s Annual Report 2023, outlining a review of activities to support members and its work across the wider construction sector, AIDAN PRIESTLEY talks to some of the federation’s leadership team to consider the year just gone and what’s to come

“I would say that the overall sentiment is positive,” says Joanne Treacy, Director of Southern & Eastern Region Services with the Construction Industry Federation, regards to the construction sector right now.

“The industry has demonstrated its willingness to collaborate with stakeholders and policy makers to deliver the built environment needed,” she says. “Our annual events in the region, Southern Construct, South East Construct and Mid- West Construct, echoed that feeling with recognition across the board that in order to create the homes and businesses, put in place the infrastructure necessary and to attract the talent required we must work collaboratively.”

While there is no crystal ball giving us a definitive projection for 2024, the indicators for a strong pipeline are all positive. The key would be to continue to work collectively towards removing the barriers and constraints currently impacting development across all sectors of the construction industry,” she says.

Civil engineering boost

A significant highlight for Director of Main Contracting Paul Sheridan is the successful launch of the Civil Engineering Apprenticeship, running at full capacity with interest across third level institutions to adopt the model currently being run by ATU.

“This is a professional apprenticeship with students earning internationally recognised professional engineering qualifications in civil engineering when they graduate,” he says. “The structure of the apprenticeship is based on an ‘earn and learn’ model where the students work for four days a week and attend college for one day. This is a highly attractive career model for students who may prefer this model to full time academic studies.”

He adds: “For the construction industry the professional apprenticeship is ideal to help attract new talent into the industry but also to develop and retain for the long-term sustainability of the industry and the career prospects of our people.”

Notably, amendments to the Public Works Contracts this year include a new Clause 15 contractual entitlement for the recovery of material cost increases.

“This new mechanism removed the concept of fixed price for materials with the inflation period commencing at the designated date. It also introduced a template workbook which calculate the contractor’s contractual entitlement to the recovery of material costs increases during the payment claim process. The recovery of costs under the new mechanism is a contractor’s right under the contract and is not a claim.”

“Another significant amendment is the introduction of a liability cap into the Public Works Contract,” he says. “This will limit the exposure of a contractor’s balance sheet to a specified quantum thus reducing unsustainable risk for contractors tendering for public works, while also providing reasonable protection the taxpayer.”

Director Paul Sheridan adds: “While these reforms are welcomed by the industry and are progressive, we look forward to working with the Office of Government Procurement on their programme of further reform necessary to ensure that public works remain an attractive commercial opportunity in a highly competitive economic environment.

“This competitiveness will be constructed on the foundations of greater collaboration, risk and cost management, design quality, professionalism and symmetric notice mechanisms.”

Industrial relations

Society, and the construction industry more acutely, continues to grapple with the impact that international events exert on the Irish domestic economy.

Cost of living inflation resulted in all Irish Congress of Trade Unions (ICTU) affiliated groups serving pay claims across the industry as Director of Industrial Relations and Employment Service Jean Winters explains.

She describes the new Sectoral Employment Order (SEO) introduced in the construction sector with increased rates of pay negotiated in the electrical and mechanical sectors, despite which picketing took place by one union earlier in the year in pursuit of an additional allowance.

“Challenges to the SEOs remain a concern,” she says and looking forward, “we expect that the Labour Court will be dealing with applications for new SEOs in the construction, electrical and mechanical sectors in 2024.”

“The introduction of the Work Life Balance and Miscellaneous Provisions Act this year has added to the cost of employment with the introduction of five days paid Domestic Violence Leave,” she adds. “The Act also gives an entitlement to five days unpaid leave for medical care purposes.”

Ireland’s housing prospects

Director of Housing, Planning and Development Conor O’Connell reflects how “at the start of 2023 there was considerable uncertainty in many aspects of housing and planning.”

He explains the impacts when at one stage over 70,000 residential units were held up in delays at An Bord Pleanála and by Judicial Reviews in the courts.

“Housing Finance became more costly and these rising interest rates deterred many international pension funds and
investment trusts from investing in Irish property,” he says. “All of these factors, as well as rising material and labour costs, were and are having a very significant impact on the prospects for Irish housing.”

He describes how “at the beginning of the year a bleak picture was beginning to emerge for many Irish housebuilders at a critical juncture for Irish housing supply.”

“Something had to give,” he adds. “Thankfully, supplementary measures were announced by the Government to aid the inflationary spiral in January.”

These included a Development Contribution Scheme waiver and Water Connection Rebate scheme, “coupled with changes to the funding models for Approved Housing Bodies and the emergence of other measures including Project Tosaigh and Croi Conaithe have significantly improved the prospects of many Irish housebuilders.”

“It’s been a whirlwind of a year and now housebuilders are hoping that some of the structural issues such as the new Planning and Development Bill, the new Compact Growth Guidelines will be introduced,” he says.

“The big issue facing us all though remains the inadequate growth projections contained in the National Planning Framework which should allow for more zoned land to cater for the increased housing that is required. It’s time to build more homes for more people.”

Economic headwinds

“The construction sector has grounds for increased positivity in 2024 as the domestic economy continues to expand,” says Jeanette Mair, Head of Economic Policy & Research.

“The most recently completed quarterly construction outlook survey finds that 51 per cent of respondents are positive about the health of the sector heading into Quarter 4 2023.

“The survey also finds that increasing costs in the form of labour and raw materials continue to put upward pressure on pricing across all sub sectors.”

There is note of caution, however, as “there is uncertainty surrounding current global events and economic headwinds that may slow the growth of the economy in the short term there is a pressing need to create a more stable policy and investment environment across the built environment.”

Jeanette adds: “The CIF looks forward to working with Government throughout 2024 to address the constraints to NDP delivery in areas such as planning, public sector capacity, digital adoption, housing delivery, and skills.”

Fostering new relationships

Director of Western and Midlands Region Justin Molloy outlines the challenges in delivering key infrastructure that the industry faces.

He notes: “The EU Regional Competitiveness Index published in April this year found that deficits outside Dublin are considerably undermining the competitiveness of our overall economy.”

“You need only look to the impact a continually delayed outer ring road in Galway has on the local economy,” he
says.

“We would also believe that greater connectivity with the northwest and border regions, particularly that of Donegal which is underserved at present, would have enormous positive economic impact for the whole of the country.”

There have been great successes throughout the year as he adds:

“Encouragingly we have positive engagement with our members in a number of areas, in particular we have facilitated meetings between members delegates and local authority officials.

“These meetings are a chance to build relationships with members and local planners and officials,” he says. “We find a huge benefit in so far as it provides an opportunity to foster greater understanding on both sides.

“It gives officials a chance to see the constraints that our members work under and equally important our members get a sense of the legislative requirements under which officials must operate.

“It helps for each to meet the other and break down barriers, by building a relationship in-person you can have an impact that simply cannot be built over phone calls alone.

“Next year we will continue to build on these relationships and host more opportunities for our members to meet with their local authorities to foster greater working relationships.”

Remarkable strides forward

Denise Tuffy, Director of Specialist Contracting, celebrates the major progress made in the year.

“The establishment of the certificate in high voltage electric systems with South East Technical University and Technical University of the Shannon and the current development of the high purity and pipe fabrication welding course led by Waterford Wexford ETB in conjunction with other ETB’s are remarkable strides,” she says.

“These initiatives intend to not only bridge skill gaps but also pave the way for Ireland’s readiness in dealing with future foreign direct investments (FDIs), especially in areas like offshore wind and industries like pharma and semiconductors.”

She describes how “continued engagement with, and on behalf of, members with industry stakeholders and educational providers highlights the impact we can have in delivering the courses that help ensure the industry has a pipeline of projects and the skills to deliver.”

“The CIF’s promotion of Modern Methods of Construction is promising, especially considering the challenges posed by labour constraints and the imperative for swift infrastructure delivery to deliver housing in across the country,” she says.

Looking ahead into the next year she is optimistic that the Smart Off-site Association, which launched earlier this year, “is poised for substantial growth and impact,” she adds.

“Their emphasis on creating a solid pipeline promoting sustainable processes and ensuring safety and efficiency indicates a proactive approach that’s essential for the industry’s progress.

“Overall, this year’s developments seem to have set the stage for significant advancements in the year to come, emphasising sustainability, safety, efficiency, and the necessary skillsets to meet evolving industry demands.”

Sustainability developments

A major development to come in the new year will arrive by way of the CIF’s Learning and Development team who are working on a founding partnership with the Supply Chain School to deliver a significant amount of new free CPD content for members via the Academy on the CIF website www.ciftraining.ie.

The Supply Chain School website will be launching on January 24 providing information on developments into the next year.
“The Supply Chain School will be vitally important to our members in developing the sustainability programmes and the activities needed to anchor sustainability in their firms,” says Head of Environmental, Social and Governance (ESG) at CIF, PJ Ryan.

With Mandatory Sustainability reporting due to commence for larger enterprises in January 2025 as part of the EU’s Corporate Sustainability Reporting Directive (CSRD), this legislation places sustainability reporting on an equal footing to financial reporting and will be third-party assured.

“The School will empower enterprises of all sizes to build out their sustainability programmes,” PJ Ryan says. “Even for enterprises not subject to the CSRD, there will still be a requirement to report out to their customers on certain aspects as part of the value chain.”

“The School bridges the gap between the reporting outcomes mandated by the CSRD and the necessary inputs that provide the data for reporting in the first place.”

Reflecting on his role, which was newly launched this year, PJ Ryan says “in the initial months, the focus has been on evaluating the status of the industry and understanding the ESG requirements imposed on businesses during tender processes and funding assessments.”

The inaugural CIF sustainability survey has been conducted to identify areas needing attention, particularly in the short term, through a gap analysis.

The committee’s initial concentration is on three working groups: the first addressing Scope 1 and 2 emissions, the second handling Scope 3 GHG emissions, and the third managing CSRD Value Chain impacts.

“Notable progress has been made in areas such as National Decisions by the EPA for Recycled Aggregates and Site-won Asphalt, both finalised, and Greenfield Soil and Stone, set for finalisation in 2024,” he adds.

CIF ANNUAL REPORT 2023

The CIF has published its 2023 annual report. The CIF is the voice of the construction industry in Ireland and provides a wide spectrum of professional services to support construction companies of all sizes across employment, health and safety, contracting, continued professional development and more. The construction industry is a vital cog in the Irish economy and our members are at the forefront of this. Read the report on www.cif.ie

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