Build 2024: ‘Reason to be positive’ on construction progress
Although the construction sector continues to deal with supply challenges arising from the Covid-19 pandemic and the war in Ukraine, the Build 2024 report asserts that there is “reason to be positive” in terms of the initiatives which aim to increase the efficiency and productivity of the sector.
The Build 2024: Construction Sector Performance and Capacity report, published by the then-Department of Public Expenditure, NDP Delivery and Reform (DPENDR) in June 2024, outlines how the construction sector has faced significant challenges over recent years including Covid-19 restrictions, inflationary pressures, and supply chain disruptions.
However, the report asserts that there is reason to be positive due to initiatives being undertaken by the public and private sectors such as the adoption of modern methods of construction (MMC), the introduction of the public sector building information modelling (BIM) mandate, and reforms to the planning system under the Planning and Development Act 2024.
On investment and funding in the construction sector, the report states that gross fixed capital formation (GFCF) – which captures both public and private investment in building and construction (B&C) in areas such as housing, commercial buildings, civil engineering, and public infrastructure – increased by circa 6 per cent to €31.5 billion in 2023 relative to 2022. In addition, forecasts anticipate GFCF in B&C of €36 billion in 2024 with further growth anticipated in the years ahead as investment increases.
On implementation of the National Development Plan, the report states that a total of 132 projects have received funding of €1.7 billion between 2018 and 2023 under the Urban Regeneration and Development Fund (URDF) while 245 projects received funding totalling €577 million between 2018 and 2024 under the Rural Regeneration and Development Fund (RRDF).
On planning and delivery, the report states that there were 32,801 residential commencement notices in 2023, an increase of 5,844 (22 per cent) relative to 2022. Similarly, the number of planning permissions granted for civil engineering projects increased by 14 per cent to 2,529 in 2023 relative to 2022.
However, it is noteworthy that Dublin has seen a significant drop in the proportion of planning permissions for apartments; falling from 94 per cent of all permissions in 2021 to 74 per cent in 2023. Nonetheless, apartments now account for a substantial share of dwelling completions across the State, rising by a factor of four from 9 per cent of completions in 2018 to 36 per cent in 2023.
The value of exports by construction companies grew by one-fifth in 2022 (relative to 2021) to €3.76 billion, with market analysis suggesting that demand for commercial office spaces is slowing down and will continue to decrease over the next two to three years.
There is an opportunity for some of the workforce in commercial property to transfer to residential construction during this period, particularly apartments. There is also potential to convert some vacant office buildings into residential units.
Publishing the report, Minister Paschal Donohoe TD said: “Build 2024 shows that collaboration between the public and private sectors continues to increase the efficiency and productivity of the construction sector.
“It is vital to maintain the existing momentum and focus on measures that can assist in removing bottlenecks to delivering on the priorities outlined in the National Development Plan.”
