Construction holds its breath as stalled virus numbers threaten reopening plans

On Wednesday, the construction industry's top lobbyist, former Progressive Democrats politician Tom Parlon, joined diplomats on a guided tour of the building site for the estimated €2 billion National Children's Hospital in Dublin.

They were all tested onsite for coronavirus. Parlon and his companions were not subjected to the State’s brain-stabbing PCR (polymerase chain reaction) swab tests that have invaded more than 3 million Irish nasal cavities since the arrival of the pandemic. Instead, the NCH site uses salvia-based PCR tests from a private provider.

"You go to a special room, you get a plastic container and you spit in it," said Parlon, the chief executive of the Construction Industry Federation (CIF).

“That goes into a sealed bag and then into a box. You’re in and out in five minutes. You get the result texted to you at 9pm that night and if it is positive, you are sent for one of the State’s swab PCR tests.”

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Parlon says that all workers on the NCH site are tested twice weekly.

“I was walking through the site and I saw these guys pouring concrete. There were six of them, all foreign nationals, and they were working very closely together. I was told that those six guys are in a bubble – they live together, travel and work together. That’s what they must do to stay safe and work.”

Parlon and the industry are aggrieved that, despite stringent protocols and a stellar safety record, much of the sector remains shut on Government orders. The CIF has launched the mother of all political lobbying campaigns for a full reopening on April 5th. Parlon has bent the ear of every politician and State official worth talking to and the CIF has written weekly to every member of the Oireachtas for the past month.

But with daily infection rates currently stalled at a high level nationally, anxiety is mounting in the sector that it may be rebuffed by nervous public health officials, projects will stall further and skilled workers will leave. The anxiety is basted in the anger and frustration of an industry that feels unfairly singled out – Ireland is the only country in Europe that has shut down most of its building sector to fight the virus.

Up to €3 billion in construction output is expected to be lost this year due to pandemic restrictions. About half of the 1,500 building sites in the State for projects worth over €1 million are currently closed due to the Level 5 lockdown, with only sites deemed essential by the Government allowed to operate. Most private housing and office schemes, for example, are forcibly closed. The State allows projects proceed for the public sector and the major foreign investors that Irish governments always seek to placate. About 40,000 of an estimated onsite 80,000 onsite staff are working. The rest are laid off.

Positivity rate

Since January, six of the biggest CIF members have, privately and outside of the public health system, performed more than 46,500 Covid tests on construction workers at essential building sites. Just 293 have tested positive with a further 193 indeterminate results. Even erring on the side of caution and treating all of the indeterminate tests as positive, that still gives a positivity rate for construction of barely more than 1 per cent during what was, at one stage, the most precipitous virus surge anywhere in the world. Construction’s positivity rate is barely one-third of the current rate in Irish schools.

The latest outbreak data from the State’s Health Protection Surveillance Centre (HPSC) shows there were 19 workplace virus outbreaks last week. Just two of those were in construction. Since the State started directly monitoring building site infections in September, the highest weekly number has been 53. It peaked at 42 in the current wave, albeit with half of sites closed. The numbers appear to suggest that construction is operating safely. But even if the data appears to be on the sector’s side, the public mood is less certain.

Paul McKenna, founder of the Mac Group, one of the top commercial builders in the State, believes the public opprobrium that surrounded the property sector after the last crash has never fully dissipated, and the Government is now afraid to be seen to be giving concessions to the industry. The Taoiseach, Micheál Martin, and the Minister for Housing, Darragh O'Brien, are both Fianna Fáil members.

“There is a fear that Fianna Fáil can’t be seen to be pandering to builders,” says McKenna. “We’re banded in with all the old-time developers. But those days are long gone. People will say we’re being looked after. But we’re builders with blue-chip clients, we’re operating safely, and we need to be allowed get on with it.”

Anger and frustration

O’Brien says he is acutely aware of the anger and frustration bubbling up in the construction sector. It practically flows under his office door, as the Minister responsible. His major concern is housebuilding – the shutdown is preventing about 800 new house completions each week. Even before the latest lockdown, Ireland was already due to fall about 10,000 new homes short of the target of 35,000 annually that we are told is needed to end the housing crisis. About 21,000 were completed last year after a late surge.

The Minister flatly denies that the Government is worried about being seen to pander to builders.

“Definitely not. Look, we’re trying to deal with a major housing crisis here. We need to work with the sector. There is no question that any of the decisions that we took were about not giving preferment to any sector. It was all based purely on public health advice.”

In the latest lockdown, all non-essential construction was shut on January 8th for, supposedly, three weeks. Builders accepted this as hospitals filled, and they expected to come back in February. It didn’t happen. It was widely expected last month that construction would be allowed open at the next review in early March. As virus numbers began to plateau, construction industry sources believe Ministers were all set to sign off on a reopening but their plan was scuppered by a last-minute intervention from public health officials. After inviting disaster by ignoring medical advice in December, there was little appetite in the Government to take such risks again.

In the UK, we have seven live sites. We never lost a day over there because the UK government sees construction as an integral part of their economy

The Government says national mobility had to decrease and that is the context in which the shutdown decisions were made. But the obvious retort is that, in reality, how much could laying off 40,000 workers out of a population of 5 million contribute to reducing mobility? Is this all just political optics?

“I understand that point. That’s why I wanted at least some of the construction sector to open during this lockdown: I wanted data to show the impact of the decision,” says O’Brien. “People can see the effect of it now. We’re down 800 homes per week. A family wrote to me to say they are building a house but currently they have to live in a mobile home on the site.”

O’Brien is adamant that he will not be drawn on what decision the Government may take next week after it receives advice from public health officials. But he did say he “hopes we are in a different position now”.

Third way

As the improvement in virus numbers hit quicksand over the past week and worries re-emerged that construction would be left in the cold again, O’Brien hinted at a third way. He suggested that in addition to the “essential” projects currently operating, private housebuilding might be allowed to resume on April 5th, instead of a full reopening. That would bring another quarter of the sector back onstream, with the remaining 25 per cent of the industry – offices and other commercial building – still shut.

Commercial builders such as McKenna want to be allowed reopen now because, they say, the sector is safe and there is no reason for Ireland to take its unique-in-Europe tack. McKenna would normally have between 12 and 15 sites operating, but currently he has just two – projects for a medical equipment manufacturer that the Government deems essential.

“In the UK, we have seven live sites. We never lost a day over there because the UK government sees construction as an integral part of their economy. The Government here doesn’t understand how construction works.”

Kevin Flynn, managing director of another major commercial builder, the Flynn group, argues that the Irish lockdown is "just a blunt instrument… a lazy approach" that doesn't take account of the data.

"The Government obviously see us as a low-value industry. I saw Leo Varadkar the other day talking about Stripe, and fair play to the Collison brothers. Leo said they were 'high value jobs'. We're obviously seen as low value jobs," says Flynn.

Antigen testing

“In their last meeting with Nphet, CIF put it to them about antigen testing, but so far we’ve heard nothing on it. We are offering to do everything we can. But I feel the decisions are not being driven by data, they are driven by public perception [of the construction industry]. I don’t feel the public sector understands what the private sector is going through. I hear academics on the radio calling for things to stay shut down and they don’t understand.”

Both builders are worried about a worsening skills shortage in the sector. Workers, they say, will go abroad where construction is relatively unimpeded, leaving the Irish sector short of skilled labour and tradespeople whenever it is allowed fully reopen.

“I paid my staff full wages to stay at home in January and February. I paid reduced wages in March and I’ve yet to decide what to do in April. We have a skills base we built up over 20 years and I don’t want them to leave me and go abroad, or down the street to work at one of the ‘essential’ projects cherry picked by the Government,” says McKenna, who directly employs 165.

Parlon says many of his members have reached 'the end of the road' with this shutdown: 'The pressure I'm getting is coming from my members, some of whom are going broke'

It isn't just the building contractors who worry about a talent drain and the ensuing pressure that it could place on the sector's capacity. Eoin Leonard is the founder of building quality certifiers i3PT. His company is retained by developers and builders literally to check their work, ensuring that it all meets regulations and can be certified. A talent drain that he says will be inevitably exacerbated by the shutdown means the sector could witness "major failures" in future.

“When high density residential and commercial reopen, they will both be vying for the same group of workers. But a lot of the foreign trade workers went home when the sector shut and they won’t come back. They’re not going to hang around Ireland from January to April or May waiting to work,” he said.

“When we return, every single project is going to be behind. It will be all hands to the pump and that is when mistakes get made. All the contractors will tell you that they are losing people every week. We already had a skills gap that was creating a capacity problem. A lot of subcontractors may end up now having to hire unskilled people. That presents a risk to quality and safety. We will have to work hard to avoid major failures,” said Leonard.

Back at the CIF, Parlon says many of his members have reached “the end of the road” with this shutdown: “The pressure I’m getting is coming from my members, some of whom are going broke.”

National battle

But despite the stasis that has set in to the national battle against coronavirus, he remains hopeful that construction might get the answer it is looking for next week after ministers meet to decide on reopening.

“The weather is getting better and the days are longer. The public discourse towards the lockdown is changing. Look at construction’s numbers and you can tell it is safe. I feel it in my bones that we will be allowed to reopen.”

Further deterioration in the virus over the weekend could yet scupper things. But desperate builders will be hoping that Parlon’s hunch is the correct one.