Construction boom collides with critical infrastructure crisis in Ireland

By April Lara

July 30, 2024

Photo of a construction site

Ireland is experiencing a construction boom. Yet, beneath this lies a profound challenge: an infrastructure gap. The paradox is there—a dynamic construction industry is being held back by outdated roads, overburdened ports, and an energy grid struggling to keep pace with demand. There is a glaring mismatch between economic ambition and infrastructure reality is that stifling growth and hindering Ireland’s potential.

There has been a dramatic upsurge with new housing completions increasing significantly, despite challenges, such as material costs and labour shortages. Data shows that in 2022, there were 29, 851 new dwelling completions, which showed a 45.2% increase from 2021 and a 41.3 increase from pre-pandemic levels in 2019. This continued into 2023 with 32,695 homes built.

Commercial construction has also seen an uptick with steady growth in office, retail, and hospitality projects. Euroconstruct, an independent construction market forecasting network, revealed that this will rise to 4.4% this year, which is the strongest rate of growth among the 19 European countries they analysed.

Indeed, the construction of non-critical infrastructure is there. What about the critical infrastructure, such as the transport network?

Congestion in Dublin and other urban areas remains a persistent problem. An example is the congestion within the Greater Dublin area that was estimated to cost €358 million in 2012 with projections suggesting this could rise to €2.08 billion per year by 2033.

One of the goals of Project Ireland 2040 is to invest in public transport, cycling and walking infrastructure, and regional connectivity to address this issue.

The country’s energy infrastructure is also under strain due to the increasing demand the need for significant upgrades to accommodate renewable energy. It is further exacerbated by the growth of data centres and other large energy users, which are projected to account for 28% of all energy demand by 2031. The good news is Ireland has committed to increase the share of renewable electricity to 80% by 2030. 

These infrastructure challenges reveal specific bottlenecks such as port capacity, water management, and digital infrastructure. Congested ports hinder the import of construction materials and equipment, while inadequate water supply and treatment facilities impact construction timelines and costs.

These bottlenecks have significant implications for the construction industry. Delays in project delivery, increased costs due to supply chain disruptions, and reduced profitability are common challenges. The industry’s ability to attract skilled workers is impacted by factors like housing affordability and transport connectivity.

Recognising the urgency of the situation, the Irish government has initiated various infrastructure projects and policy reforms. These include increased investment in public transport and efforts to streamline planning processes.

Addressing these challenges is critical for unlocking the full potential of the construction sector and driving sustainable economic growth. A joint effort from the government, industry, and investors is necessary to bridge this gap and ensure Ireland's continued growth.

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