Mr. Tom Parlon:

On behalf of the CIF, I thank the committee for the opportunity to address this important issue, which could have a major influence on the way that we deliver housing in the future.

Modern methods of construction are defined in the UK Ministry of Housing, Communities and Local Government cross-industry working group with seven different levels. These range from simple on-site innovative processes employing new techniques, equipment or materials, right up to 2D panelised systems such as timber frame housing and 3D volumetric units that are complete or near complete 3D units. Both 2D and 3D units typically employ either timber or steel fabrication.

In 2016, the CIF set up a policy committee to support the digitalisation and modernisation of our approach to delivering construction projects. The committee contributed to the establishment of the construction sector group’s subgroup on innovation and digital adoption. The subgroup has seven key actions to answer the productivity challenges and steer construction towards a more sustainable delivery model. These seven actions are already delivering national centres to drive digital adoption, research and innovation and the development of MMC.

We are all aware of the need for the continued development of a modern-facing industry that delivers best value for clients and answers the major societal challenges we face. We know there is a race to secure the next generation of skilled labour for all industries and with the ongoing roll-out of the NDP, Ireland’s construction sector is meeting these challenges head-on.

Our members have been adopting off-site supply chains for the past three decades in certain specialist subsectors. Elements of the housing industry have used timber frame, a form of 2D MMC, to deliver its homes for the past 30 years, culminating in 50% of scheme homes being delivered using this technology in 2022. Apartment developments have been extensively using precast or hybrid concrete frame systems for the past 20 years to efficiently deliver medium to high rise developments. Using off-site manufacturing supply chains can offer certainty of delivery in terms of time and cost and bring major advantages in the on-site programme duration.

However, we have an industry that relies on certainty. It relies on a line of sight for demand for a particular type of service or at least a pipeline that allows a degree of preparation and investment based on the skills and product that will definitely be procured. Our industry can have a long lead-in time to delivery, but when the green light is given, all the demand and risk passes on to the supply chain partners. They are expected to respond with resources as if they have been storing them up waiting for an instruction to proceed. The report on the costs of residential construction commissioned by the Department of Housing, Local Government and Heritage focuses on typologies and the variation in standard specifications across the four European exemplar sites.

The industry itself can focus on the optimisation of its supply chain by streamlining demand and ensuring that investment supports a focus on standardisation of approach to delivering a high performance product that can meet the highest standard required by our building regulations and offer a high-quality solution for building users. Moving towards the use of off-site fabrication allows for better quality controls, better use of labour so that skilled people can perform higher value works and provide traceability for assurance of standards and cost-effective asset management. The off-site manufacturing companies need to have better visibility on client demands and they want to see direct frameworks being established so they can commit their investment.

The recent news of market failures for both Entekra and Legal and General should be a wake-up call for the market and housing clients in particular. Ireland’s construction sector remains a very fragmented network of sub-supply chains with almost 50,000 registered enterprises, more than 90% of which have fewer than ten employees. That network of enterprises has to respond to where demand lies.

There is little room for investment in future development, research, innovation and carrying out pilot projects to try to move into new emerging sectors. Unless there is a clear signal from construction clients that there will be a sustained demand for particular services, companies do not have the luxury of being able to reposition their business to build that capacity and take advantage of it.

Over the past three years, the CIF has published three separate reports on MMC, which are included in our appendix to this statement. There are a number of key issues facing the sector that will determine whether we build greater capability in the sub-supply chain to deliver through the use of off-site manufacturing. They include: the need for platform-based designs to allow the supply chain to calibrate its offering in a standardised approach and generate efficiencies from scale; enterprise grants and low-cost finance to stimulate capital investment and support growth in capacity; repositioning our skills delivery to allow the provision of task-based training for industrial needs that recognises where production demand is; a standardised procurement pack, with frameworks, preconstruction service agreements and alignment to allow collaboration with contract parties; alignment of the required standards to support MMC, thereby removing barriers to entry but demanding a golden thread of technical compliance data; a financial delivery model to support the business process cycle with front-loading for procurement, vesting linked funding models, insurance and alignment of certification sign-off; and appropriate design development and information management, with a design for manufacture and assembly process.

The smart off-site association within the CIF is made up of some of the largest providers of off-site fabrication in the State. There is an opportunity for the industry to double its production scale, which would significantly contribute to meeting the targets set out in Housing for All. Add to that the additional opportunity for education and health in off-site manufacturing supply chains and you can see how there could be demand constraints ahead. Alignment of the needs of the State under the NDP as well as major private sector clients can help to establish what requirements there are for MMC services. The MMC sub-supply chain will undoubtedly respond to the need for greater capacity.

We can truly aspire to a more digitally enabled, sustainable and modern industry that is capable of delivering our infrastructure, homes, schools and hospitals. We can also have an industry that is world class and exports those services and products all over the world when demand contracts domestically. We are already doing this in many mission-critical facilities for global clients. Now is the opportunity to scale that offering for the rest of the NDP and housing.