Home Building Shortage Worsened by Construction Skills Gap
The housing crisis in Ireland has been exacerbated by a severe shortage of skilled workers in the construction sector, according to the Construction Information Services (CIS). Despite a surge in residential construction activity in 2024, Ireland falls significantly short of its government target for new home completions.
Construction Boom, Housing Shortfall
CIS reports that 55,000 new housing units commenced construction by the end of the third quarter of 2024, a significant increase compared to 33,000 for the whole of 2023. However, only 20,000 homes were completed by the same period, considerably lower than the government’s target of 33,500 new homes annually.
Skills Gap Hinders Progress
The industry analysis group highlights the growing skills shortage in the construction sector as a major contributor to the housing shortage. This lack of skilled labor slows down construction rates and drives up material costs, further hindering efforts to meet housing demand.
Government Incentives and Future Outlook
The government has implemented incentives like a waiver of development contributions to encourage residential development. While this has generated a “front-loaded pipeline” of activity, CIS warns that the challenge lies in sustaining this momentum beyond the policy’s expiration.
CIS predicts a decline in construction activity in 2025 and 2026 due to the reduced pipeline of projects. It also expects a 50% decrease in investments in civil construction due to the nature of the sector’s dependence on large infrastructure projects.
Hospitality Sector Remains Strong
Despite the overall slowdown, the hospitality sector shows resilience. Continued investment in hotels is expected, driven by strong consumer demand and a projected €385 million investment in 2025.