Construction industry set to decline by 3%

Updated: Wednesday, 20 Feb 2013 19:07

Output from the construction industry is set to decline by 3% this year after a 9% drop in 2012, according to Davis Langdon in its annual review.

In the review, the quantity surveyors said that contractors are feeling the most pressure as they rely on "live" construction projects.

The review said, that as a consequence, contractors are being more selective about what projects they tender for because of a lack of resources and high tendering costs.

The review reveals that there were 4,000 housing starts and 8,000 completions during 2012 - less than a tenth of the annual total at the peak of the market.

It said that tender price increases were modest in 2012, though well below the cumulative reductions since 2008.

Increases in construction costs were modest and Davis Langdon noted that very few people are taking up construction related courses at third level.

Davis Langdon's Ireland director, Paul Mitchell, said that even with a strong recovery in the construction industry, it is highly unlikely to return to the wholly unsustainable levels of the mid 2000s.

He said he believes that an industry that accounts for 10-12% of GNP or 8-10% of GDP would be a sustainable one.

''Even if the Irish construction industry grew by an average 10% per annum over the next number of years it would be 2023 - 10 years from now - before we would reach the 12% of GNP mark,'' he added.