The construction industry is expecting growth of 15% this year, according to a new report by consulting firm Aecom. 

While the sector has had a tough start to 2021 with non-essential construction sites currently shut under Level 5 restrictions, Aecom said it expects output this year will 'significantly exceed' 2020 levels.

However, it said output is unlikely to reach pre-Covid levels.

Speaking on Morning Ireland, John O'Regan, Director of Aecom Ireland said their forecast is based on the presumption that normal activity will resume shortly, as the vaccine roll-out continues.

"We are obviously hoping that construction sites will reopen soon and it is great that the Government seems to be prioritising the reopening of the sector and schools," he said.

Mr O'Regan said they are forecasting that construction output will be around €22 billion this year.

"Obviously the longer the lockdown goes on, the greater the impact on that figure.

"Construction output will probably be around €2 billion per month," he said.

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Housing supply

The country continues to play catch up when it comes to housing supply, with figures indicating that less than 20,000 housing units were completed last year.

Mr O'Regan said we are still very short of what is required.

"The Central Bank has said that 34,000 new units need to be built in Ireland each year, in order to relieve pressure.

"The 20,000 built in 2020 is a huge shortfall but we are hoping that if the industry can reopen soon we will get back to levels higher than this - perhaps 22,000 units in 2021," said Mr O'Regan.

Construction of commercial units

While demand for housing is strong, the report states that construction in other sectors may struggle, such as commercial office space.

"The jury is out on the future of office work space.

"There is a significant amount of construction still underway in the office sector, but there is uncertainty about what the next generation of office space will be like, given that many people have become used to remote working," he said.


The report suggests that access to materials and other equipment has been unaffected by Brexit to date.

While the country is dealing with numerous threats to supply chains, Aecom said it expects price inflation for 2021 to be be "marginally" higher than 2020, reporting at 2%.

Last year, Aecom said that figure was 1%.

"This is very positive news for the industry and for consumers as there was considerable anticipation that the cost of building would climb sharply in 2021," he said.