Builders warn of skills shortage after increase in house building

Builders are warning of a looming skills shortage as new figures show their industry continues to expand on the back of the Republic’s housing squeeze.

The Ulster Bank Purchasing Managers' Index (PMI), published on Monday, shows that house building drove a sharp increase in activity in the sector in March despite disruption caused by heavy snow early in the month.

The index, which follows the sector’s performance on a monthly basis, hit 57.5 in March, indicating a spurt in growth.

The PMI takes 50 as its benchmark. Any reading above that figure indicates that the industry expanded on the previous month, while any result below that indicates that it shrank.

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March's reading was down on the 59.2 recorded in February, but Simon Barry, Ulster Bank's chief economist, Republic of Ireland, said that this reflected problems caused by the bad weather early in the month.

“Despite having to contend with adverse weather during the early part of the month in particular, Irish construction activity continued to expand at a very brisk pace in March,” he said.

While the entire industry grew, Mr Barry noted that strong growth in house building led the way.

This element of the index recorded a figure of 60.3 in March, indicating strong growth on the previous month. February’s reading was 61.

Apprentices

Builders hired more workers in March, with Ulster Bank saying that the industry’s job-creating rate reached a seven-month high.

News of the growth and demand for new workers prompted the Construction Industry Federation to warn that the State needs to support the recruitment of apprentices and students to avoid a skills shortage by 2020.

Federation spokesman Shane Dempsey said that in 2016 the industry estimated that it would need 112,000 new employees by the decade's end.

However, he pointed out that this was based on the need to build 25,000 new homes a year, a figure that now stands at 35,000.

At the same time, projected growth in State spending on roads, schools and other similar projects is far higher than it was two years ago.

Concern

“It’s a huge challenge,” Mr Dempsey warned. “We had 27,000 apprentices at the height of the boom, it’s now at 2,000 to 3,000. We need to range that up to 5,000 or 6,000 a year by 2020.”

He added that the education and training system would have to increase its intake of trainees and undergraduates in building-related courses.

The federation spokesman also expressed concern at the low rate of recruitment of women to these courses. He stressed that the industry could not limit itself to hiring from just half the population.

Monday’s figures from Ulster Bank show that both commercial building and civil engineering, which is mostly State-backed large construction projects, also grew in March.

“Furthermore, confidence levels among Irish construction firms clearly remain very buoyant as sentiment was little changed from February at levels that are amongst the highest on record,” Mr Barry said.

“Over 63 per cent of firms expect activity to increase in the coming 12 months, underpinned by confidence about the prospects for both the wider economy and construction industry itself.”