Minister for Finance and Public Expenditure and Reform, Paschal Donohoe has welcomed a new Building Innovation Report giving an overview of trends in the Irish construction sector, including the initial impacts of Covid-19 on the industry. The report follows the recent publication of an economic analysis of productivity in the Irish construction sector.
Few sectors of the Irish economy have been as volatile over the past twenty years as the construction sector. The Building Innovation report identifies a number of high impact actions to be undertaken to increase innovation and output in the sector in order to deliver the economic and social infrastructure this country needs.
In 2019 the Department of Business, Enterprise and Innovation launched the Government’s Future Jobs Ireland Strategy based on embracing innovation and technological change, improving productivity, enhancing skills and transitioning to a low carbon economy. Building Innovation is strongly aligned with that strategy.
Three important themes have emerged, which if addressed, can help improve profits, wages and output for the industry, and thereby provide value for money in the delivery of Project Ireland 2040. These include:
1. The need for the industry, particularly SMEs and small firms, to increase investment in innovation and technology in order to spur the next wave of growth based on a foundation of digital adoption , by both clients and contractors.
2. The need for ongoing regulatory reform of public procurement , environmental, labour and other areas in order to streamline and assist in achieving competitiveness and sustainability.
3. The need to increase certainty and visibility of the pipeline of projects to provide industry with confidence to invest and individual’s opportunity to choose a career in the built environment.
Minister Donohoe said, “In spite of Covid-19, the extensive requirements for housing and infrastructure identified in Project Ireland 2040 remain substantially unchanged. The Government remains committed to investing public capital expenditure into the development of new social, economic and climate infrastructure.
More than ever, Ireland needs a competitive, dynamic, and sustainable construction sector that can deliver high quality physical infrastructure for all our citizens.
The shutdown of sites due to the necessarily imposed public health restrictions posed a great challenge to all sectors of our economy. I am confident that the implementation of the actions outlined in this report, alongside the continued, open dialogue between Government and industry stakeholders through the Construction Sector Group will positively affect the sectors’ ability to deliver and overcome challenges around capacity following the recent restart.”
Welcoming the publication of the report, Tom Parlon, Director General of the Construction Industry Federation and member of the Construction Sector Group said, “The Building Innovation framework charts a way for the construction industry and the State to collaborate efficiently in building a truly innovative and dynamic industry over the next decade. The benefits of doing so will be felt by every citizen in Ireland and in the coming generations. For example, the recently published Programme for Government is heavily dependent on having a dynamic construction industry operating at optimum levels. In addition, the construction industry will be front and centre in driving economic recovery in the near term, the housing required to solve the ongoing crisis, and the infrastructure required to reshape Ireland up to 2040. This requires coordination, coherence and commitment across the industry and the multiple Government agencies involved in the delivery of construction output in Ireland. We look forward to working with our partners to modernise our industry and in doing so rebuild our economy and reshape our society to the maximum positive impact on every citizen’s wellbeing.”
Micheál Mahon of the Society of Chartered Surveyors Ireland and chair of the Construction Industry Council welcomed the report, saying, “The Report provides a roadmap to Government and industry to remove barriers to modernisation by providing leadership through R&D, reforming public procurement, streamlining planning processes, advancing education and critically, maintenance of Government investment as set out in Project Ireland 2040.
Construction productivity levels are at the same level now as they were in 2010. A significant proportion of the industry is already well advanced in the digitisation process. However, the construction industry comprises a very large proportion of SMEs and it is now critical that the adoption of digitisation by this cohort of the industry is encouraged to invest in technology and training with the ultimate goal of a more productive and cost-effective industry.”
The actions identified in this report will inform the ongoing work programme for the Construction Sector Group (CSG), which was established in 2018 following the launch of Project Ireland 2040, and acts as a forum for dialogue between Government and stakeholders in the industry. The CSG meets every quarter, providing an opportunity to monitor the implementation of these actions and the response to Covid-19 over the coming period.