CapEx Construction News: 2021 Turnover at Ireland’s Top-50 contractors tops €10bn

Courtesy of:                      Irish Building Magazine Article – 28rd June 2022

Source:                                Please click here Irish Building Magazine for the full article / link to their website

 

Ireland’s Top-50 main and specialist services contractors achieved a combined turnover of over €11.60bn in 2021 up from €10.55bn in 2020. An increase in extraordinary times of 8.40%, that’s according to the annual industry league table that appears in the latest edition of Irish building magazine.

Overall positivity is high but underlying challenges need to be addressed, with most contractors stating the first quarter of this year saw an increase in turnover and expect to continue through the rest of the year.

John Sisk & Son retained top position with turnover of over €1.485bn, down slightly from €1.50bn in 2020.

Mercury Engineering also retained its position as the leading specialist contractor in the country and second overall on the Top-50 with turnover up by over 42% from €1bn in 2020 to €1.48bn in 2021.

Since 2015 Irish building magazine has featured a cross-section of the Top 50 contractors as part of its annual ‘Leaders in Construction’ interview series and survey.

A stand-out project for the period was the Grangegorman East and Central Quads, by John Sisk and Son, a new and very much-needed home for 10,000 students was delivered, the project is the largest of its type under project 2040.

Colin Walsh, Media Director, Irish building magazine said: “The results continue to exceed expectations and reflect demand for construction services in Ireland. An increase in turnover of 10.40% for the Top-50 in 2021 shows that even in the most challenging of times the industry navigates through difficulties and delivers vital projects for the country and private clients.”

Construction Cost Inflation remains to the fore of most construction bosses’ minds and especially on public projects and while welcomed, the recent measures announced by Government to tackle construction cost costs inflation in public works, the measures do not go far enough and need to acknowledge that the current public works contracts are not equitable and place the burden of the risk on the shoulders of contractors. This inequity is having a knock-on effect with a recent CIF survey concluding that ‘nine out of ten’ construction companies report as unwilling to take on fixed-price contracts given the seemingly endless and exceptionally high increases in the cost of raw materials.

The same report also noted that more than four out of five construction companies surveyed (82%) said that the Ukraine conflict has led to the disruption of supply chains in the construction sector. Additionally, 98% of construction companies reported an increase in the cost of raw materials over the last three months alone. Until these issues are meaningfully addressed the Governments plans are untenable.

Growth abroad

The Top-50 shows that Irish contractors are gaining momentum abroad with a non-Irish turnover of over €4.2bn in 2021.

In an effort to mitigate Brexit’s impact on UK activity many Irish contractors have looked to mainland Europe, the UAE and the US to develop and grow markets.

Construction cost inflation

Linesight’s recently published Construction Insights, which is combined with its Quarterly Commodity Report predicts that core commodity materials prices, such as steel, copper, lumber, plasterboard and diesel will remain inflated, with increased demand and supply constraints posing major challenges for delivering construction projects and tender price inflation. This is in stark contrast to the optimistic note and predictions for the levelling out of prices in the report covering Q4—and the war which no-one could have foreseen.

“Last year closed out a bit stronger; after all the lockdowns we’ve been through, we got a good finish to the year,” said Richard Joyce, Managing Director, Europe at Linesight, commenting on the construction industry in Ireland. However, while business is booming, supply chain issues and materials supply will pose major challenges.

“Looking to this year, with the ongoing Russia-Ukraine conflict, a resurgence in volatility in lumber and plasterboard prices will have a direct impact on the residential and commercial sectors in 2022, while rising steel and copper prices will have a particular impact on the high-tech industrial sector.

“What people forget is that the price of shipping, containers, trucks and diesel all affect the price of materials – it’s not just the manufacturers.” With rising fuel and transportation costs adding to the high prices and supply chain issues, Joyce calls the current situation “a perfect storm”. However, he remains cautiously optimistic that the wheel of the economic cycle will keep turning now, and this may be relatively short-lived.

Looking forward

Given Ireland’s reliance on imports to meet domestic demand, and the importance of both Russia and Ukraine as suppliers of steel to the EU, domestic steel prices are set to continue on an upward trajectory, reflecting the supply chain disruption that is being seen as a result of the current conflict. Already at record levels in 2021, the rapid escalation of steelmaking costs amid the surge in energy prices has resulted in even sharper rises in steel prices so far in 2022. Linesight forecasts that in Ireland, steel rebar and steel-flat product prices are expected to rise by 10.1% and 8.7% respectively to the end of 2022 (between Q3-Q4 2021 and Q3-Q4 2022).

Construction jobs span the gamut from onsite work, construction project management, engineering, design, engineering, digital construction technology operation. The construction industry is now far removed from its traditional image and offers great opportunities to young people.

You can see the Top-50 contractor’s league tables and read a cross-section of Interviews with the ‘Leaders in Construction’ in the latest issue of Irish building magazine. Subscribe now to receive your copy in print and or via the digital edition.

The issue also features the winners of the Irish Construction Excellence Awards 2022 (ICE Awards 2022) including an exclusive with Jim Hayde, Industry Contribution Award recipient.

 

Courtesy of:                      Irish Building Magazine Article – 28rd June 2022

Source:                                Please click here Irish Building Magazine for the full article / link to their website

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