The Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe, has published the ‘Build 2024 – Construction Sector Performance and Capacity’.
The Build 2024 report provides a comprehensive insight and a number of key findings into various aspects of the construction and built environment sector, including costs, planning, skills, productivity and sustainability. It highlights a variety of positive trends in the construction sector in 2022 and 2023, which include:
– 41,000 planning permissions for housing units in 2023, an increase of 21% over 2022
– 17,601 homes upgraded to a BER rating of B2 or above in 2023, an increase of 108% relative to 2022
– Construction and construction-related apprentice registrations increased by 3% and 2%, respectively, in 2023, relative to 2022
Build 2024
Publishing the report, Minister Donohoe 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 (NDP).
The report analyses Ireland’s construction and built environment sectors, including current challenges and initiatives to improve efficiency, productivity, and quality. It acknowledges that the industry has faced unprecedented challenges during the Covid-19 pandemic, inflation, and supply chain issues while also making substantial inroads in adopting Modern Methods of Construction (MMC) and Building Information Modelling (BIM).
Sector investment
Gross Fixed Capital Formation (GFCF) captures both public and private investment in building and construction (B&C) in areas such as housing, commercial buildings, civil engineering and public infrastructure. GFCF in B&C increased by circa 6% to €31.5bn in 2023 relative to 2022. Forecasts anticipate GFCF in B&C of €36bn in 2024, with further growth anticipated in the years ahead as investment continues to grow.
National Development Plan
The National Development Plan (NDP) 2021-2030 provides €165bn in capital investment. An additional €2.25bn in capital funding was agreed by the government in early 2024 to support NDP project delivery. Two core funds under the NDP are the Urban Regeneration and Development Fund (URDF) and the Rural Regeneration and Development Fund (RRDF). A total of 132 projects have received funding of €1.7bn between 2018 and 2023 under the URDF. A total of 245 projects received funding totalling €577m between 2018 and 2024 under the RRDF.
Under planning and delivery trends, the report shows increased residential commencements and planning permissions, although it notes Dublin saw a drop in apartment planning permissions.
Procurement reforms are underway, which will see the adoption of greater project lifecycle processes in the Public Works Contract and the Capital Works Management Framework (CWMF).
Under sector costs, the report notes a slight decrease in material costs and significant drops in energy prices, while there has been a 38% increase in construction employment since the Covid low, with a tight labour market and efforts to attract new entrants continuing.
The report notes that undergraduate entrants in engineering, manufacturing, and construction accounted for 12% of all new entrants in Ireland in 2022/2023. There was also a rise in apprenticeship registrations and increased training in energy efficiency, with The Build Digital Project and other government initiatives aimed to enhance digital technology and MMC adoption.
Sustainability
Construction and demolition (C&D) waste reached 9 million tonnes in 2021, a 10% increase from 2020, and is projected to rise to 15 million tonnes by 2030. The upcoming “Supporting the Circular Economy Transition in the Irish Construction Sector” report will recommend reforms to embed circular economy principles, aiming to reduce C&D waste.
Greenhouse gas emissions in the construction sector rose from 505,000 tonnes in 2020 to 665,000 tonnes in 2021, a 31% increase. New guidelines for public projects and cement procurement, set to be published in 2024, will help reduce these emissions, with the cement sector accounting for 5% of Ireland’s emissions in 2022.
The Climate Action Plan 2024 outlines steps to halve emissions by 2030 and achieve net zero by 2050. The built environment sector’s emissions dropped to 11.1% in 2022 from 12.3% in 2021, thanks to stricter regulations and improved efficiency.
The National Retrofit Plan shows promising progress, with 17,601 homes upgraded to B2 status or above in 2023.
In conclusion
The Build 2024 report concludes that there is reason to be positive in terms of the initiatives which the public and private sectors have underway to increase the efficiency and productivity of the industry. It also underscores the importance of innovation, funding, and sustainable practices in overcoming challenges and advancing Ireland’s construction sector.
The Build 2024 – Construction Sector Performance and Capacity can be downloaded at https://www.gov.ie/publications