There’s some­thing very wrong with the build­ing sec­tor but can Leo fix it?

Bray People - - OPINION -

NEW fig­ures just re­leased by the Con­struc­tion In­dus­try Fed­er­a­tion ( CIF) paint a very wor­ry­ing pic­ture about the state of the build­ing sec­tor and the knock on ef­fect this is hav­ing on hous­ing and the econ­omy as a whole. De­spite the fact that there is huge de­mand for hous­ing right across Ire­land, the CIF’s newly pub­lished Con­struc­tion In­for­ma­tion Ser­vices re­port re­vealed plan­ning ap­pli­ca­tions and build­ing com­mence­ments re­mained static in the first half of 2017 when com­pared to the same pe­riod last year.

In eco­nomic terms – given the mas­sive de­mand for new houses and apart­ments – this is bizarre and it high­lights, in stark terms, just how dys­func­tional Ire­land’s hous­ing sec­tor has be­come.

For their part the CIF have iden­ti­fied three key is­sues which, they say, are pre­vent­ing the build­ing sec­tor from work­ing as it should and re­spond­ing to de­mand.

These ‘fun­da­men­tal is­sues’ are the lack of avail­able fi­nance; de­lays and ob­sta­cles in the public pro­cure­ment process and the plan­ning de­lays.

These three key is­sues are, ac­cord­ing to the CIF, cre­at­ing un­nec­es­sary de­lays and pre­vent­ing the ef­fi­cient and timely de­liv­ery of crit­i­cal con­struc­tion projects.

This isn’t just lim­ited to hous­ing ei­ther, these same is­sues are also ap­par­ently de­lay­ing ma­jor in­fra­struc­ture projects that are seen as key to get­ting the na­tional econ­omy back on track and spread­ing the ‘re­cov­ery’ out­side the cap­i­tal.

The con­struc­tion sec­tor is crit­i­cal to any re­cov­ery. The di­rect and in­di­rect em­ploy­ment this sec­tor has the po­ten­tial to cre­ate will be vi­tal if we are to see the econ­omy re­turn to a pe­riod of sus­tained and sus­tain­able growth.

It’s about far more than pro­vid­ing houses, which is ob­vi­ously hugely im­por­tant in it­self.

If Ire­land’s econ­omy was as healthy as the Gov­ern­ment con­tin­ues to claim, the con­struc­tion sec­tor should ac­count for about 12 per cent of the coun­try’s GDP. At the mo­ment it ac­counts for just seven per cent, well below the agreed healthy level.

Clearly some­thing needs to be done but what can Leo Varad­kar and his cabi­net do to stim­u­late the sec­tor?

Fi­nance is a key is­sue but the new lend­ing laws were in­tro­duced for a very good rea­son. They are de­signed to pre­vent a re­turn to the dis­as­trous ex­cesses of the boom years. They have worked and they need to be main­tained, not eroded.

Where the Gov­ern­ment can and should act is on pro­cure­ment and plan­ning. Pro­cesses that are need­lessly com­pli­cated, long winded and costly and which need to be sim­pli­fied.

The Gov­ern­ment also needs to open its wal­let and start spend­ing on hous­ing and ma­jor in­fra­struc­ture projects, a move that would pro­vide a short term jobs boost and long term eco­nomic ben­e­fits. This needs to hap­pen across the coun­try as the nar­row Dublin-cen­tric ap­proach is a proven fail­ure.

There are so­lu­tions to our cur­rent predica­ment but they will be costly. What we re­ally need are politi­cians with the brav­ery to im­ple­ment them.

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