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Paul Tully and Contributor TAKING THE LONGIRELAND ANNUAL REVIEW 2019 VIEW INDUSTRY SPOTLIGHT Taking stock of the island of Ireland’s 2018 construction industry performance and predictions for 2019 and beyond SIX STEPS TOWARDS IMPROVING INFRASTRUCTURE RESILIENCE Resilience preparedness and how to manage potential future threats OUR FUTURE CITIES Where investment is needed to ensure our cities support sustainable growth FOREWORD Welcome to our new look Ireland on housing, economic growth and TAKING THE Annual Review 2019. As a company international market changes and committed to building a better world, shocks in the Republic of Ireland we’re always looking to improve and (ROI). We’re also delighted to include strengthen how we do things from an interview with Belfast City Council our delivery of infrastructure projects Chief Executive, Suzanne Wylie, LONG VIEW to the research we conduct and who offers her insight into foreign conversations we share with colleagues, investment, the changing face of retail clients and organisations. Our goal is and smart city initiatives in Northern to unlock the transformational change Ireland (NI). and innovation required to move the In this year’s industry spotlight industry forward. commentary we take stock of This year, to get a better the island’s 2018 economic and understanding of the long view of the construction performance and reveal construction industry in the island of the changes we see ahead, including our Ireland, we’ve changed things up a little prediction that in 2019, tender price by asking senior industry professionals inflation in NI will increase by around to tell us what their biggest challenges 2.5 per cent and moderate slightly to an will be over the next 10–20 years. We average of six per cent across ROI. We also wanted to know how prepared they also anticipate construction industry feel to respond. Our survey results on output in ROI to grow by 20 per cent in the following pages reveal an industry 2019 to €24 billion and by six per cent that is optimistic, with 77 per cent of to £3.2 billion in NI. respondents anticipating growth. The By taking a long view of the results also indicate an industry that is construction industry now, we can speed feeling the impact of a deepening skills up the development of innovations shortage, political upheaval and lack of and ideas needed to design and build public funding. tomorrow’s infrastructure, buildings and Furthering the long view places that respond to the challenges conversation, we’ve included thought ahead. By keeping the conversation leadership articles written by AECOM going and by working together we’ll experts addressing a number of key be better prepared for the future and issues affecting the industry as it moves able to make the most of tomorrow’s towards becoming more sustainable, opportunities. Enjoy this year’s read. resilient and digitally-enabled. We We look forward to working with you hear from Mark Gantly, President of to build a more resilient future for the American Chamber of Commerce construction in the island of Ireland. Ireland, about the topic of foreign direct investment, and interview the Ireland Leadership Team economist, Jim Power, who comments Cover image Image of the island of Ireland captured by a NASA satellite Image credit: Jacques Descloitres, MODIS Rapid To read a digital version of our Ireland Annual Review 2019 visit: Response Team at NASA GSFC (Wikimedia Commons) ireland.aecom.com CONTENTS 4 8 11 14 EXECUTIVE SUMMARY AND OUR FUTURE CITIES FDI AND EMBRACING AN INTERVIEW WITH … KEY FINDINGS CONSTANT CHANGE The island of Ireland’s Suzanne Wylie, Chief A snapshot of our survey population is growing. So ROI remains one of the Executive, Belfast City results from senior industry how do we ensure our main fastest growing economies Council, who shares her professionals, revealing key cities support sustainable in Europe, with US thoughts on the long view findings around expected growth? Landscape business investment a big for Belfast, commenting future industry growth, architects Paul Tully and contributor. Mark Gantly, on the Belfast City Region challenges ahead and Edward Frampton suggest President of the American Deal, the changing face of preparedness for the future. where investment should Chamber of Commerce retail and the opportunities be targeted to ensure our Ireland, offers four steps technology can bring to the cities remain affordable, to ensuring the future capital city. vibrant and resilient places success of foreign direct to live and work. investment in ROI. 16 20 24 28 SIX STEPS TOWARDS IMPROVING INDUSTRY SPOTLIGHT THREE WAYS TO REDUCE WATER AN INTERVIEW WITH … INFRASTRUCTURE RESILIENCE INDUSTRY ENERGY USE What lies ahead for ROI Economist, Jim Power, Extreme weather and and NI’s construction Water companies are who shares his insight into cyber-attacks threaten industries? Can we expect hugely dependent on ROI’s future economic our transport networks. growth over the next 10–20 energy to deliver their outlook, providing expert Transport planners John years and what changes services, costing them a commentary on potential Humphreys and Beatriz might we see? We take lot of money and making challenges to delivering Martinez Pastor discuss the stock of 2018 construction it harder to meet stringent Ireland 2040, VAT and importance of resilience industry performance water industry regulations. housing supply and ROI’s preparedness and how to across the two regions and In response, water industry resilience to withstand future manage potential threats make some predictions specialist David McCune shocks such as international in six steps. around output and tender looks at opportunities market changes. prices for 2019 and beyond. for water companies to make their processes less energy hungry. 30 34 HOW TO BUILD COLLABORATIVE ACKNOWLEDGEMENTS AVIATION TEAMS Learn about our Air travel is booming contributors’ expertise globally, requiring airports and experience plus to be improved and contact details. expanded. Transportation specialist Derval Cummins and aviation programme manager Joe Glowacki suggest six steps to achieving the level of collaboration required to deliver complex aviation infrastructure projects successfully. 3 TAKING THE LONG VIEW Executive summary AECOM’s survey results and thought leadership-led OUR SURVEY RESPONDENTS discussion reveal and respond to some of the big issues facing construction across the island of Ireland. Public sector building Despite complexities and changes ahead, we can report that the general outlook is one of positivity, with a commitment from industry professionals to keep 34% building the resilience required to forge ahead. Commercial onstruction professionals The industry will need to continue 24% across the island of Ireland embracing innovation if it is to see their businesses growing respond and adapt to the digital, on average by as much as a environmental and societal changes Civil infrastructure quarter in the coming two demanding more efficient project decades. That’s one of the key delivery. However, it is clear from Cfindings in our annual survey. our respondents that more needs to 13% Amid such optimism, and despite be done, with almost half believing differences around planning, governing they are only ‘average’ at adopting bodies and tax, among other factors, innovative delivery models. It is Residential we see that ROI and NI face similar also clear our respondents see challenges. These range from population Dublin as the city across the island growth and skills shortages, to making the most progress towards increasing resilience and environmental delivering future-ready, smart civil 11% and cyber threats. infrastructure, with Cork and Belfast So, to the specific challenges and how following behind. Water the industry is preparing to meet them. In response, and to ensure our With a greater desire for regional industry is sustainable and resilient in connectivity, the rapid introduction the long term, we believe we need to of smart technology and continuing deliver projects more collaboratively, 7% population growth, industry and design our cites to be smarter and more governments need to adapt. However, connected and affordable; invest in many respondents told us they felt that more efficient processes; maintain and Other the industry is not evolving fast enough strengthen our FDI offer; and embed to meet these changing needs. resilience into infrastructure design. The availability of people with the Achieving these will take time, effort 5% right skills, too, remains a significant and mapping out a shared vision for challenge not only across the island but the future between communities and the world. And while most respondents private and public sectors that sets out Airports see engineering as the most crucial skill the best route forward. The long view required to keep the industry moving starts now. forward over the next 10–20 years, only 3% 15 per cent feel they are fully prepared to source the right talent. Industrial 3% Survey results compiled from responses from 70 senior construction industry professionals from across the island of Ireland. 4 Key findings AN OVERALL POSITIVE OUTLOOK ROI’S ABILITY TO DEVELOP AND ATTRACT TALENT IS AT LEAST AS IMPORTANT Almost eight out of 10 respondents TO EMPLOYERS WHO WE SPEAK TO, anticipate their business to increase AS A SPECIFIC CORPORATE TAX RATE. in 2019, with almost half of them THE ATLANTIC ECONOMIC CORRIDOR expecting a growth rate of 5-25 per STRETCHING FROM CORK THROUGH cent. However, almost half of our 77% LIMERICK, SHANNON AND GALWAY WILL respondents see resources as the most BECOME A WELCOME COUNTERBALANCE TO significant challenge in growing their DUBLIN AS INFRASTRUCTURE INVESTMENT business over the next five years. IS DELIVERED. — SURVEY RESPONDENT SKILLS REMAIN THE KEY CHALLENGE AHEAD Top three factors impacting the delivery of major projects in the next 10–20 years. 40% 33% 27% Skills/talent shortages Lack of public funding Political change/upheaval Almost two thirds believe they are Funding shortages and complex very good to excellent at planning, procurement approaches are the integrating and collaborating with top reasons why projects fail to ‘get project partners on project delivery.
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