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Lockdown dealt €2bn hit to construction output in 2020 – report

The initial shutdown of the construction sector for seven weeks during the initial stages of the Covid-19 pandemic knocked €2bn off construction output last year.

That is according to a report carried out by EY DKM on behalf of the Construction Industry Federation. 

Analysing official data, the report concluded that the shutdown – which started on 27 March – led to a contraction in the value of construction output of around 7.3% to €24.7bn.

It estimates that the contraction this year will be of the order of €3bn.

On the housing front alone, that translates into an estimated decline of close to 5,000 housing completions in 2021 bringing the total to 16,000, compared with the total for 2020 of 20,676.

It is also less than half of the 28,000 completions envisaged for 2021 pre-Covid.

However, the report said that is on the assumption that the current partial shutdown of construction – which came into effect at the start of the year – ends on 5 April.

Reports over the weekend suggested that the suspension of most construction activity could be extended beyond that date.

Currently, construction is only allowed in limited exceptional circumstances, including for essential health and school building work, key infrastructural projects and social housing.

The construction and development of private housing and private non-residential buildings is not permitted.

According to the report, Ireland is the only country across Europe with a partial lockdown of the construction sector.

“A number of countries, notably Poland and Denmark, are strongly promoting construction activity, accelerating the commencement of new infrastructure and renovation projects to support their economies,” it states.

“A fully functioning construction sector is essential to ensure Ireland remains a competitive place to do business,” it added.

“There is now a risk that the continued restrictions placed upon the sector could lead to reputational damage at an international level, which could cause FDI clients to look elsewhere for construction expertise,” the report concludes.

Meanwhile, the Director General of the Construction Industry Federation has said around 800 houses a week are being missed as the sector remains closed and at least 10,000 houses this year will not be provided due to the lockdown. 

Tom Parlon said cases of Covid-19 in construction were never more than 56 at the peak of society being fully reopened.

Speaking on RTÉ’s Morning Ireland, he said the closure of the sector is a major loss to the Exchequer and is not doing anything in the battle against Covid-19.

Mr Parlon said companies that have been forced to close are in danger of losing staff to those firms that can remain open, while there is also a risk of losing workers to the continent or the UK where construction remains open.

He said people who have their mortgage approval are in danger of losing that approval because there is not supply in the housing market.

Mr Parlon said that construction workers are “inclined to work” and he suspects that many are doing nixers in their local communities.

They would be safer on regulated sites, he said, and the National Public Health Emergency Team (NPHET) should consider this.

Article Source – Lockdown dealt €2bn hit to construction output in 2020 – report – RTE – Brian Finn

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