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2024 construction supply chain dynamics

As 2024 begins, the most helpful thing we can do for the industry is to unpack the data from Q4 2024.

2023 was another challenging year for Ireland’s construction industry, with increased project opportunities, set against a backdrop of uncertain financing and fluctuating European trends.

Stabilising Irish Construction Market

The marketplace in Ireland is showing signs of stabilisation as indicated in Turner & Townsend’s Q4 2023 report. Contractors are somewhat divided in their outlook: 37.5% see the market as stable, another 37.5% feel it is warming, and 25% perceive a cooling trend. The housing sector, especially private housing, is thriving, driven by government initiatives. However, challenges like skilled labour shortages and rising construction costs persist, particularly impacting specialist sectors like data centres and life sciences. The push towards net-zero is slow, with less than a quarter of projects significantly engaged in such initiatives, hindered by high costs and regulatory barriers. Overall, the industry anticipates continued stabilisation in tender prices, with a cautious eye on wage pressures and global macroeconomic uncertainties.

BNP Paribas Real Estate Ireland’s Findings

BNP Paribas Real Estate Ireland’s data shows a decrease in construction activity in November, marking the fifth consecutive monthly drop. This decline spanned commercial and residential sectors, attributed to a slowing economy, project completions, and delays in client decision-making. Dublin’s warehouse sector is expected to complete a record year in 2023, but the 2024 pipeline appears weaker. The office market is also slowing, with speculative commencements off the table, potentially until 2027. Surprisingly, despite positive national accounts data, the residential sector continues to weaken, likely due to project completions toward the year’s end.

Euroconstruct’s Analysis

Contrasting the Irish growth, Euroconstruct’s analysis predicts a downturn in European construction. Ireland’s residential sector is expected to grow by 12% in 2024, starkly outpacing the European decline of 15% in residential construction for the same period. The overall Irish construction sector is forecasted to grow by 3.2% in 2023, leading European nations. Growth is expected across various sectors, including civil engineering and non-residential. Government initiatives, like the establishment of the Infrastructure, Climate and Nature Fund, are anticipated to maintain sector activity. However, concerns linger over construction inflation, rising interest rates, and skills shortages.

What to expect in 2024?

Ireland’s construction industry is on track to ‘buck the trend’ in 2024 compared to its European counterparts, with significant growth, especially in the residential and civil engineering sectors. However, it faces challenges like construction inflation, rising costs, and a skilled labour shortage. Strategic decision-making and adaptability will be key for sustaining competitiveness and addressing the evolving demands of the construction landscape in Ireland and across Europe.

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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