Public Expenditure Minister Michael McGrath on the industry’s biggest challenges in a post-pandemic world

by | Oct 26, 2021

These past two years have thrown significant challenges to the construction industry, many of which could not have been foreseen or planned for. While price inflation and volatility, wage inflation and labour shortages were all evident prior to the pandemic, these challenges have been compounded and exacerbated over the past 18 months.

While some were short-term obstacles, several will have longer term impacts. As we move beyond the pandemic, it is timely to take stock and consider the road ahead. While many uncertainties remain, there is one point on which I am certain: the Government’s commitment to an ambitious, unprecedented programme of public investment is undiminished.

The outlook for the construction industry is therefore positive, in spite of the challenges we face. The critical thing for the sector now, is to continue to adapt and innovate in order to maximise the impact of public investment and optimise the role of construction in our economy.

Innovation – the biggest challenge and our greatest solution

In recent years, the Government has put in place a number of new structures and processes to enable better collaboration with the industry. To combat industry challenges, a number of actions have been taken. These include the establishment of the Construction Sector Group (CSG), providing certainty and timely information to the industry through the Project Ireland Investment Tracker and designing a new action plan to fund and promote apprenticeships.

In my view however, there is one theme that can be transformative to tackle the full spectrum of challenges – innovation. Innovation is a key area where the Government is actively investing to ensure the industry is equipped to deal with challenges and obstacles as they arise.

Innovation is simply the introduction of new things, ideas or ways of doing things. Increasing innovation in the sector is paramount in order to deliver successfully on the ambitions set out in the Government’s Project Ireland 2040 (PI) investment strategy, achieve the goals of Housing for All and take the steps necessary to address climate change.

How to overcome the issues

The opportunities to address the construction sector challenges are numerous and to grasp these, cultivating innovation in the Irish construction sector is paramount. In other words, there is very clear scope for improvement. Successive iterations of the Build Report published by my department have shown that in compartive international terms, productivity in the industry is lagging behind many countries. This is a huge challenge.

Sustainability continues to be at the heart of our long term planning and investment priorities through Project Ireland 2040. Innovation in this sector will play a key role in its sustainability as the construction sector actively seeks ways to enhance processes, products and established working models that are cleaner and greener.

Three years ago, pre-pandemic, the Construction Sector Group was established. Meeting quarterly, this open and transparent dialogue between all parties in the sector is key in overcoming sectoral challenges and encouraging innovation.

CIF is one of the industry bodies represented along with representatives from across the sector from engineers and architects to planners and surveyors. In support of the innovation opportunity is the CSG Innovation and Digital Adoption Subgroup was established to deliver on seven priority actions outlined in the Building Innovation Report.

These include:

  • Expanding the CIF’s construction research forum
  • Identifying research and innovation funding sources for the construction industry
  • Supporting industry to develop modern methods of construction
  • Establishing a construction technology centre with the support of Enterprise Ireland
  • Establishing a Digital Network under the Construction SkillNet
  • Digitising the planning application process
  • Establishing the Build Digital Project with support and funding from industry

The integrated delivery of actions arising from the group are contributing to a more competitive, dynamic and sustainable construction sector which is required to build the Ireland of the future.

One such innovative action that was sprung from the group is the Build Digital Project. This is being led by my department and will increase digital adoption across the Irish construction sector through dissemination of information, education, and guidance. This will be relevant across the construction sector including in the key area of housing. Improved digital adoption can assist the speed of delivery, reducing the cost of delivery, and improving the quality of output and the maintenance of structures once built.

Another example of the increasing support for the innovation agenda was announced in the recent Housing for All strategy, whereby the role of enterprise agencies will be expanded to include the provision of funding and supports for innovation and productivity related projects in the domestic residential construction sector, in compliance with state aid rules.

This is a major development as up to now the enterprise agencies have been mandated to support exporting sectors of the economy. In addition, sustainability continues to be at the heart of our long term planning and investment priorities through Project Ireland 2040. Innovation in this sector will play a key role in its sustainability as the construction industry actively seeks ways to enhance processes, products and established working models that are environmentally friendly.

Minister Michael McGrath

A cohesive industry approach

Despite Covid-19, public investment in construction in Ireland in 2020 and 2021 remains among the highest in the EU as we have taken decisive action to support the sector by increasing public investment anddriving innovation.

The revised National Development Plan 2021-2030 will show a renewed Government commitment to investment in capital projects and for the Project Ireland vision to become a reality we require a vibrant modernised sector. We must adopt new technology and digitise to aid in productivity and sustainability.

The response to sectoral challenges requires this unity of purpose. This will drive innovation in the industry and help us to overcome current and future challenges alike. This is critical for the sector can continue to deliver the projects that will make Ireland a better place for us all to live. As well as the prevailing issue of increasing innovation, we must rethink how we attract, retain and upskill labour in the construction sector.

The ability to attract additional capacity from abroad can play an important part but we must place a much greater emphasis on upskilling our existing labour force and dramatically improving diversity.

In particular, in my view, industry bodies on the Construction Industry Council should coordinate efforts to improve perceptions of career prospects within construction and should make a renewed push to attract female colleagues into what has traditionally been promoted as a male-dominated industry. We all have an important roles to play in providing the best solutions to build a sustainable industry.

Capturing the full innovation potential of the construction sector will require a committed and concerted effort from all stakeholders to drive the innovation agenda. This will be facilitated by government through the successful delivery of actions such as the Build Digital Project and the Construction Technology Centre.

Despite the challenges, we can be rightfully optimistic in facing the road ahead. For the Government’s part, the commitment to ambitious levels of public investment is clear and we are also supporting a range of actions to help the sector from the bottom up. I have every confidence in the ability of this sector to rise to the challenge, to embrace digital innovation and to be agile in responding to future opportunities.

This is the key to developing a modern, productive and commercial viable sectorwhich will be a key enabler of delivering pivotal public policy goals.

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