At least 50,000 new construction jobs will be needed by 2020 if there is any chance of new housing supply meeting rising demand, employers’ body Ibec has said.
However, that forecast solely relates to the Government’s ‘Rebuilding Ireland’ plan, which aims to deliver more than 26,000 new houses, per year, from public and private sources by 2020. Ibec said that regarding wider estimates — of between 30,000 and 40,000 new units being needed per year to meet housing demand — then in the region of 80,000 new building jobs would be necessary.
That would put construction employment at around 9% of the total workforce and back to levels not seen since the late 1990s boom years. However, Ibec sees employment continuing to rise in line with a growing economy.
In its latest quarterly economic outlook, published today, Ibec has forecast Irish economic growth of 4.2% — in GDP terms — this year, following expected growth of close to 6% for 2017; adding that the country’s current phase of growth is more sustainable than the boom period of the Celtic Tiger era.
“All indicators are now pointing to strong and sustainable growth in Ireland’s economy in 2017 and 2018 underpinned by business investment and strong consumer spending. The economy has now moved past its ‘recovery’ phase and can look forward confidently despite external threats,” it said.
The group added that while it is likely that Brexit will impact on growth this year, that should be outweighed by positive domestic and global momentum.
Ibec sees exports rising by 3.8% this year, consumer spending rising by 3% and employment increasing by 2.2% — in turn bringing the unemployment rate down to around 5.3%.
The group said that ‘full employment’ — typically signified by an unemployment rate of between 3% and 5% — could be reached before the end of 2018. However, Ibec said that this wouldn’t necessarily result in high inflation, which it sees averaging around 0.9% this year.
“Several countries — including the UK, US, Germany and Japan — have experienced long periods of low unemployment and low inflation in recent years,” it said. According to Gerard Brady, Ibec’s head of tax and fiscal policy, fixing the housing crisis remains a challenge for Government.
“The major question facing the economy over the coming years will continue to be the ability of the economy to meet the needs of a growing population in a sustainable manner. Major challenges are already clear in the housing sector.
“Delivering on the promise of growth with stretched capacity and a tight labour market, whilst also maintaining competitiveness, will be a key challenge”.