Saturday 17 November 2018

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INDOpinion

Housing shortage solution needs construction workers to return

Wednesday, 9th May, 2018 4:22pm

The Construction Industry Federation (CIF) is calling on construction workers among the Irish diaspora to come home. The CIF estimates that it will need to attract at least 112,000 workers up to 2020 to deliver on current housing and infrastructure targets, Director General, Tom Parlon argues.

The CIF has repeatedly flagged the urgency for attracting new employees into the industry as well as encouraging those who may have left to return to working in the Irish industry. In 2016, EY/DKM consultants and SOLAS predicted that the industry would need 112,000 additional employees up to 2020 to meet the demands of Government strategies in housing and infrastructure.

Since then, the ESRI’s estimate of the level of housing output required has increased by 30 per cent to 35,000 new houses per year. In addition, the recent announcement of the National Development Plan (NDP) increased forecast in investment in infrastructure by billions.

It’s now likely we need to increase the number of people working in the industry closer to 120,000 people to deliver on Ireland’s construction requirements.

The recent announcement of the National Planning Framework and NDP is a potential game-changer for the Irish economy and society. Both these strategies are entirely contingent on the industry having skilled workers to deliver essential housing and infrastructure.

The laudable ambition and vision in these strategies has not been matched by investment in our education and training systems so they can produce the employees that will deliver this activity.

A failure to attract people into the industry, both onsite and offsite, will see labour costs increase and eat away in the available capital for investment in vital infrastructure. I want to give a stark warning here - if we do not start to address this issue now, the housing and infrastructure crisis will not be solved before 2025.

At the height of the last economic cycle, the industry had over 220,000 workers. At the nadir of the recession, we had lost over 150,000 employees to redundancy and emigration. We estimate that about 100,000 emigrated mainly to Australia, North America, and the Middle East. As we have been hiring about 1,000 a month over the past 50 months, we believe that the numbers of people we can reactivate from the live register is nearly spent.

We are now turning to the diaspora as a rich source of skilled labour that we need to tap into over the coming years to help us meet Ireland’s demand for construction activity. It’s anticipated by the Central Bank that about one in sixteen people will be employed in construction in 2019 and we currently have around 134,000 currently directly employed.

The conditions are getting more favourable and we believe the industry’s gravity will begin to ‘pull’ emigrants back to Ireland in the coming years.

Salaries are on the increase. For example, last year, the Government instigated a 10 per cent increase in the salaries across the entire industry.

Due to skills shortages, wages and conditions for engineers, surveyors and technologists are increasing strongly year on year. In addition, the industry has changed and now offers diverse, technology-focussed careers that people can use to work globally.

This growth in construction jobs over the last five years is a testament to the strong pipeline of work in Ireland over the next 15-20 years. With a 25 year pipeline of work outlined in the NDP and Project Ireland 2040, we’re calling on the diaspora to come home and build their lives, their communities, their careers, and their country.

The value of construction output rose by approximately 19 per cent in 2017 to €17.7bn and is expected to increase by 14 per cent to circa €20bn in 2018. The construction industry has regained less than a third of all the jobs lost during the crisis, suggesting that a large proportion of construction workers, who lost their jobs during the crash, are likely to have emigrated.

According to a recent report by the Central Bank of Ireland, one in every two workers who lost their jobs in Ireland between 2007 and 2012 had previously been employed in construction. While there has been a strong recovery in employment in other sectors, figures for construction employment in Q1 2017 was 46 per cent lower than in 2007.

The construction industry has made a significant recovery over the last few years, but one key area that we have yet to recover from is the devastating loss of talent and skills that happened throughout the downturn.

Construction has emerged from the economic downturn a more nimble, modern, and sustainable sector. We learned some very hard lessons throughout the recession and I believe the industry has improved drastically as a result.

Ireland is facing a growing need for talent and skills in construction and while concerning, this is a very good news story for those abroad with construction experience and trades, who may be thinking of coming home.

Now is a very good time to re-enter the industry, there are lots of opportunities available.

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