Tough economic times have seen a decline across Ireland’s construction industry, but the infrastructure sector is set to record positive growth between 2013 and 2017.
|Despite a significant decline in the Irish construction industry – a CAGR of -28.25% between 2008 and 2012 – infrastructure construction is projected to record a CAGR of 1.03% between 2013 and 2017. This growth can primarily be attributed to various transport plans and government initiatives that are seeking to stimulate the economy.
Depressed economic conditions as a result of austerity measures are making it difficult for Irish households to repay housing debt. Furthermore, prospective buyers – especially those taking their first steps onto the property ladder – are finding it difficult to secure mortgages without being asked to pay often prohibitively large deposits. Consequently, despite residential construction’s being the largest construction market in Ireland – accounting for 34.7% of total construction output in 2012 – it was also one of the worst performing between 2008 and 2012, recording a CAGR of -29.37%.
High unemployment, low wage growth, and a depressed economic outlook have rendered customer spending in Ireland cautious, which combined with the fear of government spending cuts and tax hikes
Customer spending in Ireland has been rendered cautious by high unemployment, low wage growth, and a depressed economic outlook. Combined with business’ fear of making large investments as a result of government spending cuts and tax hikes, this has had a significantly detrimental effect on Ireland’s commercial construction market, which recorded the most significant decline of all sectors: a CAGR of -32.93% between 2008 and 2012.
Uncertainty in the global economy had a negative effect on exports, affecting the manufacturing industry in particular. This, coupled with the more general economic malaise, saw the Irish industrial construction sector record a CAGR of -31.36% between 2008 and 2012 – the second largest decline of all Irish construction markets.
Infrastructure Construction – The Light In Ireland’s Construction Market
Although all sectors of Irish construction registered negative growth between 2008 and 2012, a low benchmark interest rate, various transport plans, and government initiatives to stimulate the economy are expected to encourage growth in the infrastructure sector between 2013 and 2017.