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Fewer construction workers than during Celtic Tiger

The National Competitiveness and Productivity Council (NCPC) has said that greater use of the employment-permit system can be part of the solution to increasing labour supply in the construction sector in the short-term.

In a discussion paper, however, it warns that other measures are needed in the longer term – including accelerating the adoption of modern methods of construction (MMC) and engaging the domestic workforce.

The body, which advises the Government on competitiveness issues, says that the housing market is currently “inhibiting Ireland’s competitiveness performance” and undermining potential improvements in sustainable growth and wellbeing.

Its bulletin on the issue states that addressing labour-market constraints is crucial for Ireland’s ability to meet housing and climate-action targets.

Accommodation shortage

The paper points out that construction is the only sector with fewer employees today than during the Celtic Tiger era – despite a significant increase in the labour force.

In December 2023, the Department of Enterprise, Trade and Employment announced a significant expansion to the employment-permit system, with changes to the jobs eligible for a permit across many sectors and roles – including some construction-related roles.

The council says that there is no quota in place for construction roles and, therefore, no limit on the number of permits that can be issued for a particular job.

It adds, however, that the current shortage of accommodation also creates difficulty in housing additional migrant workers.

Competition for workers

“Employment permits are part of the solution to increasing our labour supply and key skills in the short-term,” the bulletin states.

“However, this solution increases pressures on our already over-constrained housing market, and we are also competing with other countries – particularly across the EU – which are also experiencing a severe shortage of construction workers.

“In the longer term, it is therefore critical that we also increase emphasis on other solutions, such as ramping up the adoption of MMC and engaging more of our domestic workforce in construction,” the NCPC concludes.