According to a recently published report by the Banking & Payments Federation Ireland (BPFI) almost 6,500 housing units were started in Q4 2021, 3.3% more than in Q4 2020 in Irland. On an annual basis, more than 30,700 units were commenced in 2021, the most in any year since 2007.
This is a substantial potential output for the residential construction sector in addition to some of the units that started in 2019 and 2020 but were not completed due to the pandemic.
While the impact of Covid-related absences will abate in the short-term, the capacity issues within the construction sector are further compounded by labour shortages.
At the end of 2021, there were over 158,000 people employed in the sector similar to the employment levels in 2001. However the composition of construction sector employment has changed significantly since then and parts of the total employment in the sector are now engaged in other construction activity such as commercial buildings and infrastructure projects.
Given the significant pipeline of residential housing commencements we have seen in 2021, it is likely that the next two years will be crucial in testing the capacity of the residential housing sector being able to deliver units in order to meet demand, with residential housing facing very real competition from other sectors of the construction industry according to the BPFI.
