Construction labour shortage: ‘If they come, we will build it’

Cost of living barrier to attracting enough builders to Ireland, says company owner

There are 127,300 construction workers in the Republic, or almost 6 per cent of the workforce, which is below the European average of 8 per cent.  Photograph: Paulo Nunes dos Santos/Bloomberg

There are 127,300 construction workers in the Republic, or almost 6 per cent of the workforce, which is below the European average of 8 per cent. Photograph: Paulo Nunes dos Santos/Bloomberg

 

The isolating experience of the Covid-19 pandemic has left some Irish people overseas contemplating a return home but, for many, the cost of living at home is a deterrent.

For Ciarán “Gooch” Wright, a Co Wexford man who sold his construction worker recruitment business in Sydney earlier this year, this will prove a challenge for the Government in fulfilling the National Development Plan, the 10-year pipeline of housing and big-ticket construction projects.

After 10 years in Australia, and with a new baby in the family, the 36-year-old – an economic emigrant of the Irish property crash – is returning home to set up a similar business, Dunwood Services, in Arklow. He has spied an opportunity to bring Irish construction workers back from Australia and elsewhere to meet a demand in Ireland.

Many Irish, like Wright, are in the same situation: it is “decision time” – after a decade down under, stay any longer in Australia and you are “probably here forever”, he says.

While the pandemic has intensified the pull to return home, the high cost of living in Ireland and of buying a home are big turn-offs. Wright sees this as a major obstacle to the Government attracting back workers, particularly general labourers, needed to build the roads, bridges, tunnels, schools and houses under the €165 billion plan.

“With the National Development Plan, everything comes down to money. It won’t work until the cost of living matches up to your wages,” says Wright.

From the middle of the Celtic Tiger years in 2005 to now, the increase in house prices has outstripped wage hikes in the construction sector.

“Until either one goes up or one goes down or they meet somewhere along the same lines, the National Development Plan will probably struggle a bit,” he says.

Celtic Tiger peak

The Government plan estimates that the projects will create an average of almost 81,000 construction jobs a year. The latest Central Statistics Office figures show there are 127,300 construction workers, or almost 6 per cent of the workforce, which is below the European average of 8 per cent. This figure reached a disproportionate 12 per cent – about 236,000 workers – at the peak of the runaway Celtic Tiger years. The tens of thousands of workers, both Irish and foreign, who left have not returned in the numbers needed now.

“It is a major challenge and we are already seeing the starting signs of it,” said Dermot O’Leary, chief economist at Goodbody Stockbrokers, pointing to the high wages already being paid to builders to complete houses under contract for next year. “They are paying for builders just to get the work done and that is before we ramp up to the 33,000 houses that need to be built a year.”

Even before considering the landmark road and infrastructure projects, O’Leary sees big gaps between the NDP and the labour it requires. He estimates there are about 40,000 residential construction workers and 70,000 are needed for the target of 33,000 homes to be built every year and – even with apprentices doubling to 10,000 a year – there will be a shortfall.

The pool of foreign workers from eastern Europe may not be there in the same numbers as during the mid-noughties because their economies and wages are better now, while housing markets are “pretty hot all over Europe particularly in the UK”, says O’Leary. “It leaves you short so that has to be filled by the Polish plumber but the flow is going in the opposite direction.”

Project pipeline

Wright identifies another challenge with drawing Irish workers home due to the Covid-related absence of backpackers in Australia, many of whom worked in construction.

“We want to bring as many Irish guys back to Ireland which was always the aim of our new business. What has transpired is we are getting Irish companies here in Sydney asking us to bring guys back over from Ireland to Sydney,” he says.

Tom Parlon, director general of the Construction Industry Federation, believes that a years-long pipeline of new projects will attract construction workers from overseas.

“I don’t have a worry about capacity. There are a lot of Irish people who want to come back but they would want to be guaranteed there are five, six, seven or eight years of fairly active work in construction. There is a bit of a herd instinct to it too,” he says.

Both the industry and the Government see the commitment of the plan as providing certainty, stability and credibility that will help attract building companies and workers. “It is setting a clear signal by us to labour markets that we need the skills,” says Minister of State at the Department of Transport Hildegarde Naughton.

Damien Owens, registrar of Engineers Ireland, said there is “a bit of a chicken and egg” about attracting the skills and workers: “People are not going to up and shift from Poland or wherever they come back from until they see the jobs manifesting.”

For now, he sees it as the reverse of the “if you build it, they will come” business mantra. “It is ‘if they come, we will build it’.”