Massive opportunity for construction business says top economist, David McWilliams

MaSSiVe oppoRtUnity foR conStRUction BUSineSS Up to 2050 SayS econoMiSt

The construction industry in Ireland has a massive opportunity Still on politics he is clearly not a fan of the new Affordable to grow over the next two to three decades as the country Housing Bill, dismissing it with some colourful language. needs 55,000 new homes a year, predicts economist David Housing he said has been a strong feature in virtually every McWilliams. election in Ireland and he believes that the increase in the Sinn He also predicted a very strong recovery at the back-end of this Fein vote in the last election, which he says Fine Gael should year and a period of ‘mad consumption.’ This he said is due to have run-away with, was because they were perceived to be the fact that while income has fallen, savings haven’t. more concerned about housing. If he is right, the knock-on effect for builders merchants and On his key assumption that the demand for new houses will the hardware trade could be huge. be around 55,000 annually, David said that there are some David McWilliams was speaking at a webinar on 23rd February specific reasons for taking that view. organised by Octabuild. One is the natural movement within the population, “counting Introducing David the incoming chair of Octabuild, Ray babies and funerals”, as he described it. On that metric we Molyneaux of Irish Cement welcomed the 100+ guests from will need about 18,000 new housing units every year. Then we the industry to the webinar on behalf of his colleagues from have the issue of immigration which could add another 10,000. the other Octabuild companies, Dulux Paints, Etex, Glennon In 2020 we had 29,000 migrants come into Ireland. Add to Brothers, Gyproc, Instantor, Kingspan and Wavin. those the need to catch up on pent-up demand with young Ray said that David McWilliams is considered one of the top people living with parents, divorces and obsolescence. We 10 most influential economists globally. But what makes only built 38% of the number of homes needed between 2011 him different to many other economists is that he presents and 2021. economic issues within a social context and in a way that With Ireland predicted to have a population in the region of just makes economics easily understood. over six million in 2050, David said that it is essential that we “David is also not afraid to put forward new ways of solving avoid a boom and bust situation in the construction industry. political and social issues,” said Ray. “Delivery is crucial no matter who builds, private or state. But And so it proved as David laid out his case for predicting why they must be decent houses at affordable prices and built in he believes that we need 55,000 new houses annually in the the right places at the right time.” coming years. He had strong words about the relationship His overall message was one of confidence and optimism. He between land owners and the construction industry: “We believes that the trauma of dealing with the pandemic throughhave been suckered into the idea that landowners and the out last year and this year will lead to a period of innovation construction industry are on the same side. Land is a cost and similar to a century ago when the Spanish Flu pandemic was should be considered as such to builders just like suppliers or followed by an innovative period in the ‘Roaring 20s’. the banks.” The owners of land are not on the side of the construction industry but both took the flak, with the banks, for the bust a decade ago, he said. Breakfast Briefing Webinar He had good news for rural Ireland, which he believes will benefit from remote working, and What’s next for sees an increase in demand for office space in small towns. the building industry? During a Q&A David was asked if he believed that the Land Development Agency could With David McWilliams deliver. He said that it can deliver Economist, Author and Broadcaster affordable housing but suggested that the state land be given away free to avoid the ‘nod and a wink’ culture that land speculation fosters.