Tuesday 11 December 2018

Housing crisis and high tax deter builders from returning

An estimated 80,000 more construction workers are needed to meet housing demand. Photo: Bloomberg
An estimated 80,000 more construction workers are needed to meet housing demand. Photo: Bloomberg
John Mulligan

John Mulligan

High income tax rates and the housing crisis are deterring skilled construction workers from returning to Ireland, the boss of one of Ireland's biggest construction firms, John Sisk & Son, has warned.

Stephen Bowcott said that while Sisk doesn't have any problem encouraging white-collar professionals to return from Australia, Canada or the UK, on-site workers such as bricklayers or plumbers are less likely to make the move home.

"For white-collar workers, we've very little difficulty," the managing director said, "but for blue-collar staff taxation has made it difficult."

He said the housing crisis makes returning home an even more daunting prospect for blue-collar emigrants, and that they typically won't be in a position to secure a mortgage large enough to buy a house around the main cities. Sisk itself employs more than 700 people.

Lobby group Property Industry Ireland and Ibec have recently estimated that an additional 80,000 workers are needed in the sector just to meet current housing demand.

There are currently about 138,000 people employed in the construction sector, according to the Central Statistics Office. Mr Bowcott said that while there is a skills shortage in Ireland, boosting productivity is a key challenge and ambition, and would go some way towards addressing the staff deficit.

He also said it was essential that more apprentices start working in construction.

"The industry needs to train them, not just for next year or for two years' time, but for 10 years from now," said Mr Bowcott.

He was speaking as family-owned John Sisk & Son said its profits soared 73pc to €24.7m last year as it continued to be a profit-led, rather than a turnover-led, business. Its revenue declined 5pc to €792.2m.

The company worked, and is working on, major projects in Ireland such as the €70m refurbishment of Pairc Ui Chaoimh in Cork, the new DIT campus in Grangegorman, the Center Parcs resort in Co Longford, the redevelopment of the Curragh racecourse, the Luas extension and Capital Dock in Dublin.

Read more: Sisk to lay foundations for robot brickies

Of its turnover, €629.2m was generated in Ireland, and €154.7m in the UK. The company has also worked on projects in mainland Europe, where it works with firms such as Primark, providing project management solutions.

In the UK, Sisk completed the redevelopment and restoration of London's Royal Academy of Arts, and also secured a contract for a £190m (€216m) overhaul of Great Ormond Street hospital.

Mr Bowcott said that Sisk had no loss-making projects last year for the second year in a row. He said it is being more selective about the types of projects it pursues, and also engaging on an increasingly deeper level with clients to understand requirements and design strategies.

The company noted that its Sisk Living division, which was established in 2016 as a specialist housing delivery unit, secured two affordable housing contracts in 2017, the first of which was delivered in Dunn Laoghaire last month.

The second, for South Dublin County Council, is due to be completed this summer.

"The business has proven that builders on a design, build and finance basis can deliver homes at a far lower cost than developers who take the risk of speculatively purchasing land up front based on securing large profit margins," Sisk claimed.

The company said it's currently delivering 3,000 residential units in the UK, arguing the work gives it a "core skillset which can be used to solve the housing issues we face at present in Ireland".

Irish Independent

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