Construction of new housing.
Around 33,450 new homes could be completed here next year, a new analysis has forecasted, with a further 31,000 to be finished by the end of 2023.
The study by the construction market forecasting network, Euroconstruct, says construction output in Ireland will likely expand by 3.2% this year, rising to 4.4% next year – the strongest rate of growth among 19 European countries.
The analysis comes as Euroconstruct holds its 96th conference at EY Ireland in Dublin, with the network noting Ireland as the only country where housing growth is forecast to be strong next year, rising by 7.9%.
In addition, Civil engineering, which includes transport, water and energy infrastructure, is predicted to expand by 2.4% this year and 5.3% in 2024, with the non-residential sector, including schools, hospitals and offices, to rise by 2.9% in 2023 and 2.6% in 2024.
Across Europe, construction activity as a whole is expected to fall by 1.7% this year and 2.1% in 2024 amid macroeconomic uncertainty, interest rate increases and tightening credit conditions, with some 13 countries expecting a fall in housing completions.
Marginal growth is expected in Switzerland, Slovakia and the UK, with modest growth forecasted for Spain and Portugal.
“In what is a very challenging period for construction activity across Europe, Ireland is bucking the trend with strong growth forecast over the next number of years, particularly in the residential and civil engineering sectors,” said Annette Hughes, Director at EY Economic Advisory and member of Euroconstruct.
“It is welcome that construction inflation is beginning to moderate, however the sharp rise in interest rates and the cost of capital remains a significant concern. Moreover, skills shortages continue to be an issue across the construction sector.”
By 2025, housing completions across the 19 analysed countries are forecast to fall to 1.51 million units – marking the lowest figure since 2016 and substantially below the 2.61 million units delivered in 2007.
The civil engineering sector will expand for the next three years across Europe, driven by strong public investment in infrastructure as well as ongoing investment in renewable energy and telecommunications infrastructure
However, non-residential building will be the weakest of sectors this year and next, the study found, before returning to modest growth in 2025.
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