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Wednesday, May 22, 2024

Ireland’s Construction Expectation for 2024

2024 is shaping up to be a pivotal year for Ireland’s construction industry, characterised by a mix of stabilisation, growth, and notable shifts in sector dynamics, even as broader European trends show signs of a downturn.

According to Turner & Townsend’s Q4 2023 report, the Irish construction market is exhibiting signs of stabilising after a period of volatility. The sector, however, remains at a crossroads: 37.5% of contractors view the market as stable, the same percentage sees it warming up, while a quarter feel it’s cooling down. This divergence in perception underscores the industry’s complex and multifaceted nature. The private housing sector, buoyed by government-led initiatives, is experiencing significant growth. Nonetheless, the industry grapples with challenges such as skilled labour shortages, rising construction costs, and the slow pace of engagement in net-zero projects, mainly due to high costs and regulatory challenges. Tender price inflation, although expected to continue, is predicted to do so at a slower rate.

Sector-Wide Trends and Developments

BNP Paribas Real Estate Ireland reports a continuing decline in construction activity as of November, marking five successive months of downturn. This trend spans both commercial and residential sectors. The Dublin warehouse sector, however, is poised to conclude 2023 on a high note, though projections for 2024 suggest a more cautious approach due to rising interest rates and construction costs.

In the office sector, a notable slowdown is expected to extend possibly until 2027, influenced by rising vacancy rates and softer lease terms. The residential sector, despite showing increases in completions and investments, is surprisingly experiencing a dip, attributed to the completion of projects towards the year’s end and rising build costs impacting the home improvement market.

Ireland vs European Construction Trends

In contrast to the European scenario, where a decline in construction activity is forecasted, Ireland’s construction sector is set to outperform its counterparts. Euroconstruct anticipates a 12% growth in Ireland’s residential sector in 2024, starkly contrasting with a 15% decline across Europe. Overall, the Irish construction sector is expected to expand by 3.2% in 2023, leading the growth charts in Europe. Civil engineering and non-residential sectors are also projected to witness substantial growth, backed by government initiatives like the Infrastructure, Climate, and Nature Fund.

Looking ahead to – and through – 2024

As we look ahead to 2024, the Irish construction industry is uniquely positioned for growth, especially in residential and civil engineering sectors, defying broader European trends. However, this optimistic outlook is tempered by ongoing concerns like inflation, rising interest rates, and persistent skill shortages. The industry’s ability to navigate these challenges through strategic decision-making and adaptability will be crucial in sustaining its growth trajectory and meeting the evolving demands of both the national and global construction landscapes.

For regular updates and insights into Ireland’s construction sector, stay informed at www.breakingground.news. Also, be sure to share your industry news by emailing editor@breakingground.news

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