In its latest report on Ireland’s infrastructure deficit, the Irish Fiscal Advisory Council (IFAC) upholds the majority consensus on measures to resolve the housing crisis. However, it does provide a detailed examination on enhancing productivity within the construction sector, an area that has been obstructing growth in housing and other infrastructural sectors where Ireland falls behind its wealthier European counterparts. Compared to these countries, the Irish construction sector operates at less than 70% productivity, and even drops to 50% when juxtaposed with our highly productive peers.
The IFAC attributes this discrepancy to the modest investment by the construction companies, a behaviour that is believed to be driven by the volatile nature of the industry and the enduring impact of the financial downfall. This reluctance has had lasting effects, most apparent in the slow adoption of advanced methods such as modular construction, which require fewer labourers and are nearly 40% more cost-effective.
The limited size of Irish construction firms, particularly the specialist home builders, also contributes to the longstanding underinvestment issues. According to the IFAC’s calculations, a total of 78,500 additional workers may be needed to fulfil infrastructural needs in housing, transport, and energy without significant productivity improvements. However, this could potentially decrease to 21,500 if construction productivity matches the average of wealthier European nations.
Regardless of the logistical difficulties of recruiting and accommodating such a large workforce, addressing this issue could also be politically challenging given the currently intensified sensitivity around immigration. Enhancing productivity within the construction sector must be a fundamental aspect of any feasible housing action plan proposed to the voters. This strategy, along with the need to hire skilled workers, is essential to lend believability to the pledged construction of myriad new homes.