– Shane Dempsey, Director, Communications, CIF, writes 2021 will be a critical year for getting the construction industry on a sustainable footing.
Shane Dempsey, Director, Communications, CIF.
As we move into 2021, Covid-19 will still be looming large. However, we have proven in 2020 that as an industry, we can work safely at near capacity following strict Covid-19 guidelines. EY is expecting outputs to be down 16% this year. In Q2, the estimate was by 35%, so the industry has pulled up its sleeves and gone at it. Housing completion figures are around 19,000 to 20,000, which is only 2,000 below what was forecast at the start of the year. I think we will continue to operate and work well as the pandemic continues into 2021.
Budget 2021 was a strong signal from the Government that there will be a good investment pipeline for infrastructure and housing. Therefore, EY believes that we may have 8% industry growth in 2021, that’s coming from -16%, so we’ll be halfway to getting back to where we were. I am optimistic about next year – the great imponderable is Brexit, of course.
The Government will have to turn off the payments tap, both to other sectors and to citizens, which may affect those being able to purchase our product. That is something we’re watching. There has also been a commitment of €10bn in public sector infrastructure – 35% of the value of what we deliver in the industry overall and we hope that this will lead private investment. So long as the Government is investing in infrastructure, international investors will look at Ireland as a good bet.
We’ve built up a good reputation for operating safely with Covid-19 and some political capital in the past while because of that. We’re one of the only sectors operating near capacity, so we’re contributing to the economy. We need to use that political capital, but we need to start to transition the industry more rapidly towards green construction. Public sector and international markets are looking at the industry to deliver smart, sustainable growth. Being a small subcontractor won’t insulate you from this pressure. Everyone in the industry will have to transition more rapidly towards sustainable construction. Innovation is a huge part of that. We’ve proven ourselves safe, now we need to prove that we can be innovative and contribute to a sustainable society.
There are frontier companies that are taking on the world in terms of data centre construction and modern methods of construction. We need to spend the next three to five years making sure that the broadest cohort of our industry is efficient, investing in technology and is becoming more productive because that’s where the pressure will be coming from.
The agri-food industry faced this challenge a few years ago, and every other sector has faced this innovation challenge. The first steps are always more difficult because they involve the larger players, who are racing ahead, actually stopping and collaborating. There’s a term, ‘co-opetition’, where companies are still competing but will sit down and share the research and innovation needs for the industry. There’s a huge incentive to do that because any money forthcoming from the EU in terms of supports and the ‘Green Deal’ will be based on green innovation in the coming years. We as an industry – I include CIF in that – and all the representative bodies, need to drive that innovation and disseminate it down to our smaller companies, bringing them together to give us their needs when it comes to innovation. Currently, our investment in that is chronically low, visa- vis other sectors.
The leadership of the industry needs to take the reins on its industrial strategy and set out how it will progress in terms of innovation, growth and sustainability. The Government is setting very ambitious targets in terms of retrofitting and ‘Project Ireland 2040’. We need to take charge of our own industry and set out our own strategy based on Smart, Sustainable, Growth.
2021 will be a critical year. If we don’t take the time to put in place these transformative changes, and just keep delivering as we have in the past, we’re missing a huge opportunity to put the industry on a sustainable footing.