Construction Industry Faces Mounting Costs and Labour Shortage Despite Growth

The construction industry showed strong growth in labour, turnover and prices during the last quarter of 2023, indicating resilient momentum despite mounting economic headwinds.

A survey of 240 Irish construction firms revealed surging turnover as 39% reported year-over-year increases in Q4 2022, with 33% anticipating this trend continuing into 2024. Employment also grew healthily as 26% added more jobs last year, and 29% expect to further expand hiring over the next three months.

However, the thriving activity faces challenges from rising costs and skills gaps. 68% of respondents saw labor costs jump from 2022, with 55% projecting continued growth into 2024, while 60% incurred more expensive raw materials, expected by 57% to persist next quarter. These supply-side strains lead 52% of construction companies to increase project pricing last year, with 45% likely to raise customer costs again in Q1 2024.

When asked to identify the industry’s greatest obstacles in 2023, 76% pointed to troubles accessing skilled labor. 62% cited growing difficulties securing profitable margins amid inflation, while 53% noted surging material expenses.

While construction activity continues gaining momentum, solving skills gaps, cost escalation and project budget overruns remain pivotal challenges for sustained success.

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