Why is the Construction Industry deemed essential during level 5 restrictions?

On Monday October 19^th Taoiseach Micheál Martin addressed the Irish public to announce that as of midnight Wednesday October 21^st Ireland would be entering level 5 restrictions for a period of 6 weeks until December 1^st. This is very similar to the level of restrictions seen in Ireland in March and April with the notable exception being schools and colleges remaining open with strict protective measures in place. The main measures introduced were the closure of all non-essential retail, a ban on all household visits, takeaway only from restaurants, work from home unless presence in the workplace is essential, 25% public transport capacity and 5km travel limit from the home. These restrictions were met with mixed views from the Irish public with some believing they are necessary due to the high incidence of community transmission resulting in high COVID numbers and others believing there is “a clear emphasis on lives rather than livelihoods,” with this second lockdown leaving many businesses in serious jeopardy. Tánaiste and Minister for Enterprise Trade and Employment Leo Varadkar, TD said that the Level 5 restrictions will cost the Irish Exchequer €1.5bn and will also cost some 150,000 jobs. The PUP scheme previously in place is now being restored at an amount of €350 for all those who earn €400 or more a week.

Industry Acknowledgement

The CIF and all in the construction industry welcomed the government’s decision that construction be deemed essential during the period of these level 5 restrictions. This said, with the privilege of being allowed to continue to operate there is a greater responsibility required from the industry with members being asked to redouble their efforts to combat COVID-19. It is important to highlight the success of the construction industry to date with regard to the efforts and measures put in place to minimize the risks of COVID-19 onsite. Each employee must complete the CIF COVID induction training before going onsite, 2 meter distancing markers are located on site, there are increased number of hand washing stations, and dedicated COVID-19 compliance officers are employed on site to ensure guidelines are being followed. Remaining open during level five is testament to the incredible efforts over the past five months in keeping the incidence of Covid-19 to a minimum on construction sites.

Why is the construction industry deemed essential?

The construction industry has largely been referred to as the backbone of the Irish economy. Studies carried out by the CIF have found that every €1 invested in construction will yield more in terms of economic and social benefit than any other sector. Closing this industry would have major societal, health and financial impacts on the nation. Though the lockdown is proposed to last 6 weeks the impacts of shutting down and reopening would have actually made that timeframe longer. Due to the fact it would have been due to reopen in December some sites would have held off until the new year to reopen resulting in up to 10 weeks of delays.

Societal Impacts

Ireland is currently battling a homelessness and housing crisis and if construction came to halt there would be a severe impact on social housing therefore worsening this crisis. There are currently 35 social housing projects across 14 counties and a new analysis of the home building market carried out by EY-DKM Economic Advisory Services on behalf of the Irish Home Builders Association (IHBA) estimates that up to 36,000 new homes per annum will be needed to meet demand over the next two decades. In 2019 builders completed 21,500 new homes, a number well below what is said to be needed to combat the crisis. As we specialize in the supply of trades and labour to the construction industry, we recognize from our day to day work that there is in fact a skills shortage in this industry which ads further to this crisis. Lower than necessary housing construction rates and labour supply shortages paired with what would have been a second halt to the industry this year had construction not been deemed an essential industry would have had detrimental impacts to society. A reduction in the development of new homes would also wreak havoc on housing prices. An increase in demand and a decrease in supply would inevitably lead to large inflation on the price of houses. 

If Ireland shut down the construction industry for a second time it would result in a negative impact on any pipelined projects. It may result in Ireland not looking like the most desirable place to have your company. Maintaining Ireland’s image of a desirable place to do business is crucial especially as Ireland currently attracts many MNE’s who provide thousands of jobs and contribute massively to GDP annually.

Health Impacts

Further delays in the construction of the Healthcare projects such as the National Children’s Hospital would cause delays in the ability of the Irish healthcare system to provide appropriate healthcare for our citizens in the years to come. Delays in the construction of Biopharmaceutical sites would have an adverse impact on the battle against COVID-19 globally as many of the world’s leading biopharmaceutical companies being headquartered in Ireland and are currently in the process of developing a COVID-19 vaccine.

Financial Impacts

From a financial/employment perspective the decision to deem the construction industry essential has meant that for now the jobs of 147,000 construction workers and around 50,000 others involved in the supply chain will remain secure. These workers are all contributing to the economy by way of taxes on their wages and helping rebuild the Irish economy. In 2019 alone €3.84bn in taxes was generated by the construction industry. A potential 10 week shut down of the industry could have lead to a loss in tax revenue of circa €740m with an additional €700m being paid out in pandemic unemployment payments during this period. Construction being deemed essential now leaves the state with additional spending power which has positive knock on effects on the state and Irish economy as a whole.

Psychological Impacts

The announcement of this 6 week lockdown has coincided with CIF Construction Safety Week with Monday’s theme being mental health, welfare and wellbeing. This pandemic has had a severe impact on everyone’s mental health and those in the construction industry are no exception. In today’s world this topic is now more important than ever. Mental Health within the construction industry has been referred to as a “silent crisis” and is believed to have been exacerbated by the pandemic. Almost a quarter of construction companies report employees being absent due to mental health reasons. Continuing to provide employment and a source of income for people of this industry will help people mentally as studies show that unemployment does make people unhappy. It is widely acknowledged that unemployment results in a loss of income as well as declining job-related skills. Low mood, anxiety, poor cognitive performance and loss of confidence are just some of the effects of unemployment. Studies have found that the unemployed have lower levels of well-being than the general population and than those in work.

We speak for many when we say that we feel fortunate to be in the construction industry and to be able to continue to operate through these level 5 restrictions and retain our jobs at a time of great uncertainty in the economy.