New Construction Industry Council report makes key recommendations to Government to revitalise the Construction Sector

November 13, 2012November 13, 2012961 Views

Tuesday 13th November 2012. The Construction Industry Council (CIC) has said over 70,000 jobs could be created if the Government delivers on its projected spend on the Public Capital Programme and facilitates the funding of major projects from alternative sources.

Address the public infrastructure deficit through full allocation of the Public Capital Programme funds and alternative funding solutions– together have the potential to create 70,000 jobs, Appoint Construction Adviser to Government to provide strategic direction and vision for the construction sector, Bring construction sector to appropriate size for Irish economy and Identify export opportunities for the construction sector

Such a move would address the current public infrastructure deficit in terms of education, health, enterprise and environment according to the CIC.

In a new report, the Council noted that infrastructure expenditure is currently 14 percent behind projected spend in the Public Capital Programme. In addition, the CIC calls on the Government to urgently implement alternative funding solutions, especially the participation of pension funds in large-scale infrastructural investment.

In light of the extremely challenging environment for financing otherwise viable building projects, the ClC pointed out its extreme frustration at the lack of progress on implementing alternative funding solutions. It noted that despite the fact that the idea of using pension funds to finance infrastructural projects was first mooted in 2009, nothing has happened to date.

The Report recommends that the Government’s Expert Group, which has been researching alternative funding solutions, urgently completes its task and that the Government implements a funding solution for Irish infrastructure without delay.

CIC Chairman and Chartered Surveyor, Derry Scully, said that much needed jobs and infrastructure would be provided if the Public Capital Programme was fully implemented.

“Ireland has an oversupply of the wrong type of building in the wrong locations. At its peak the construction sector was twice the size it should have been, employing directly or indirectly 377,000 people. Now the sector employs just 138,000 people. By prioritising and delivering spending on delivering key infrastructure outlined in the Public Capital Programme, and accessing alternative funding, the Government could redress this imbalance, create employment, stimulate the economy and facilitate foreign direct investment” Scully said.

The Construction Industry Council made the call in a new report entitled ‘Building our future together’.

The CIC represents all the leading organisations involved in the construction sector in Ireland, including; the Society of Chartered Surveyors Ireland, Engineers Ireland, the Royal Institute of the Architects of Ireland, the Construction Industry Federation, the Association of Consulting Engineers and the Building Materials Federation, which represent a combined total of approximately 50,000 members nationwide.

The Council has also called for the appointment of a Chief Construction Adviser– reporting directly to a Government Minister– to take on overall responsibility for the strategic direction for the construction sector and to lead it back to stability.

“As we point out in the Report there is no overall vision for what a healthy dynamic construction industry should look like. Responsibilities and accountabilities are separated from each other within Government departments, agencies and regulators with little coherence or connectivity between them. As a result decision-making for the sector remains disjointed and patchy. By way of contrast the agri-food sector has overcome many similar challenges under the stewardship of a Government Minister and support organisations like An Bord Bia and Teagasc. That’s what we need for the construction sector,” Scully said.

The CIC also called on Government to implement these initiatives to ensure that the construction sector returns to a normal size for a country such as Ireland. “Based on the latest estimates of GNP for 2012, the optimum size of the industry is currently €18.7bn; however, the actual output is not expected to exceed €7.5bn”, said Scully.

The Council also said that the professional skills within the Irish construction sector should be marketed abroad as part of Ireland’s economic renewal.

“Opportunities exist to develop a global construction services centre of excellence in Ireland for the design, finance, construction and management of projects. This could create a hub of the construction sector akin to what the IFSC achieved for the financial services sector. In many European countries up to 50% of total construction turnover is accounted for by exports. The market is there and we have key competitive advantages in the design, financing, management and construction of complex projects” Scully concluded.