26.04.2010
New research carried out by the Construction Industry Federation (CIF) points to a significant decline in construction output in Ireland over the next 12-18 months as the Government's public capital investment programme is unwound:
This CIF ( www.cif.ie) research finds that the aggregate value of projects for which shortlists of contractors are being created for Government projects is running well below Government commitments; that the conversion rate of these tenders may be as low as 60%, and that that the time lag between tender announcement and commencement can be two to three years. This study also shows - among other things - that less than €45m worth of new public construction projects were awarded over January and February. Moreover, the period between short-listing and project commencement has increased significantly.
Based on these findings, it seems that the aggregate value of projects for which shortlists will be prepared in 2010 will be about €1-1.5bn. With a 60% conversion rate, this points to a pipeline of around €600-€900m worth of new public construction projects, though with uncertainty as to when they will begin. CIF says that 'this pipeline bears no relationship to the Government's own commitment to invest €5.5bn in 2011, 2012 and 2013'- which is not good news.
CIF projections are that 2010 construction output values across all sectors, including public and private, will fall to €12bn, from €19bn in 2009, and will fall below €10bn next year. The medium-run equilibrium level for Ireland's construction industry lies, based on European comparison, in the €18-20bn range. The CIF has called on Government to carry out activity research into the Irish construction industry.
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Related contacts
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Construction Industry Federation (CIF)
Web: www.cif.ie |
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Source: James Hunt |
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