Report warns of rising houses prices and delays
The construction industry could be unable to meet pent-up demand for housing and infrastructure, even when fully reopened, due to labour shortages and a “boom and bust” cycle in the sector, according to new research.
The report titled ‘Job Quality in the Construction Sector’ warns that this could have serious implications for Ireland’s housing and infrastructure building strategies, resulting in higher house prices and delays in other areas.
It also highlights issues with low pay for lower-skilled workers, bogus self-employment, bullying, a lack of diversity, and a “heavy” reliance on workers from abroad.
The document produced by the Think Tank for Action on Social Change (TASC) with the Chartered Institute of Building (CIOB) highlights positives about the construction sector as a means of improving living standards for lower skilled workers.
However, it describes the boom and bust cycle as a “root cause” of many of the problems faced by the construction sector, including labour shortages, productivity and job stability.
According to the research, earnings in the Irish construction industry are “on average” good, with pay close to but still below the EU average.
However, while professionals such as engineers, architects and directors “very well paid”, less skilled manual workers are paid “below EU norms”.
The report also found that one in five construction workers were classed as “solo self-employment”, twice the rate in the general workforce.
Solo self-employment can be an indicator of bogus self-employment.
However, lead author and TASC Senior Policy Analyst Dr Robert Sweeney stressed that not all solo self-employed workers were bogus self-employed.
His report notes skills shortages particularly among professionals and crafts including carpenters and electricians.
The report also highlights that Irish construction is “heavily reliant” on foreign-born workers, which may be due to the fact that the work does not always require proficiency in English.
“It is estimated that at least 20% are immigrant workers but this is likely to be an under-estimation because surveys do not capture undocumented workers or those who are “usually resident” in the country, who come and work only for a short period of time,” it notes.
Dr Sweeney said the Covid-19 pandemic had thrown a “spanner in the works” of the recovery from the financial crisis which had been under way.
“Important questions now are whether the sector is primed to meet the pent-up demand that has been building since before the pandemic, and whether the public sector will re-enter the housing development space,” he continued.
The report urges the Government (as the biggest client in construction) to end the “cyclicality” by “prioritising a clear, long term pipeline of directly built social and affordable housing.”
Dr Sweeney notes that Ireland’s build of public housing has “almost evaporated”, and said the public sector should step in when there was a recession.
The report also calls for the creation of a Construction Innovation Fund for SMEs to stimulate investment in research and development.
Further research should be carried out to establish the true extent of bogus self-employment, and the Government should “drive enforcement” through the terms of public procurement policies.
The report advocates structures to improve the pay of less skilled workers “through productivity growth and redistribution from relative high scales of professionals and high-skilled workers.”
It also recommends initiatives to boost female participation, along to tackle bullying and mental health issues.
CIOB Ireland Policy and Public Affair Manager Joseph Kilroy noted that historically, career guidance counsellors had been reluctant to send students into the sector due to its unpredictability, adding that this had contributed to not only a skills shortage, but also a lack of diversity.
He contrasted that with the situation in Germany where there was a “positive emphasis” on the value of trades and practical work.
He also warned that the reputation for cyclicality in construction was holding back the sector and its output.
The research found that while construction provided an opportunity for meaningful work and a greater sense of autonomy, there was evidence that workers were under more time pressure and stress now than during the last boom, and it also remains more hazardous compared to other forms of work.
However, the report insists Irish sites are among the safest in Europe.