- BUILD 2020: €9.1bn Public Investment for Shovel-Ready Projects
BUILD 2020: €9.1bn Public Investment for Shovel-Ready Projects
With all the pandemic chaos and the recent change in government (after months of speculation about the make-up of government), long-term domestic strategy appeared to take a back seat. There was little reference to Project Ireland 2040, which is the government’s long-term, overarching strategy to make Ireland a better country for all its people. This is perhaps understandable given the responsive nature of policy-making since the outbreak of the virus, however, it is critical for the current government to respond to the pandemic without sacrificing important capital projects. For this reason, it was great to see the publication of the annual BUILD report by the Department of Public Expenditure and Reform earlier this week, which closely follows the announcement of the July stimulus package that includes increased public investment for shovel-ready projects by 12 percent in 2021, to over €9.1 billion.
BUILD 2020: Construction Sector Performance and Capacity offers an important, and timely, update on Ireland’s construction sector as we emerge from the initial Covid-19 restrictions. While it is still too early to determine the full impact of Covid-19 on the industry, the Ulster Bank Construction Purchasing Managers’ Index posted 51.9 for June, which was the first time in four months that any growth in construction activity has been recorded. We wrote about this welcome end to the second quarter of what has been an incredibly challenging year here: http://test.townmore.ie/news/the-importance-of-building-on-a-good-start/
BUILD 2020 is an important marker of the industry’s current capacity, which is vital as we try to understand the ongoing constraints, pending risks and potential opportunities post-pandemic. Significantly, this governmental report is compiled with input from the Construction Sector Group (CSG), which is made up of representatives from the CIF, SCSI, Irish Planning Institute, RIAI, Engineers Ireland, Association of Consulting Engineers of Ireland, Irish Congress for Trade Unions and The Building Materials Federation. This multidisciplinary approach is important in the context of the upcoming review of the National Development Plan.
It is worth noting that BUILD 2020 signals a change in how investment is made in public infrastructure for Ireland. There is a clear ambition to move away from the previous approach that – in the words of Minister for Public Expenditure and Reform, Michael McGrath – “saw public investment spread too thinly and investment decisions that didn’t align with a well-thought-out and defined strategy”.
In addition to the increased public investment above, the Minister has committed to working with industry body groups to secure the skills pipeline and to driving productivity improvement. Obviously this is welcome and we look forward to seeing this policy change translate into action on the ground.