Ireland 'needs influx of construction workers'

A housing shortage in the Republic of Ireland will not be solved without "significant immigration" of construction workers or by persuading people to switch from other sectors, an economic watchdog has warned.

Housing has become one of Ireland’s biggest social, economic and political issues.

The Fiscal Advisory Council said investment in housing has been low in Ireland for more than a decade.

It describes the shortfall in the housing stock as "a fundamental challenge" for the Irish economy.

Ireland’s economy has recovered relatively strongly from the pandemic and inflation is now falling from its recent peak.

However the council warns that the economy is now hitting capacity constraints, primarily housing.

"Forecasts for new dwellings construction are only sufficient to keep pace with a rising population, rather than addressing the stock’s shortfall," it said.

‘This context is important for understanding the main causes of Ireland’s capacity constraints, and their effect on the sustainability of economic growth over the medium term."

It warned that one of the difficulties in tackling the problem is a shortage of skilled workers.

'Scarring effects'

The council points to official figures which show that last year there were just over 63,500 workers in construction, compared to a peak of 115,550 in 2007.

That peak level of construction employment coincided with peak annual inward migration of 151,100.

"This suggests that without significant immigration of building workers over coming years, or a switching of workers into construction from other sectors, it is unlikely that the shortage of dwellings in Ireland will be meaningfully addressed," the council said.

It warned there could be "a limited desire" for employees to switch into construction work due to "a multitude of scarring effects from the sector’s collapse in the late 2000s".

During Ireland’s property and banking crisis thousands of construction workers lost their jobs and businesses.

However, unemployment among previously employed construction workers is at a record low which the council says research suggests is likely due to high emigration from 2008–2012 of this cohort.

Ireland’s coalition government has announced a series of measures which are intended to increase housing supply.

However tangible progress has been limited which has helped boost support for the main opposition party, Sinn Fein.