Oireachtas Joint and Select Committees

Wednesday, 1 March 2023

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Challenges Facing Small and Medium Enterprises: Discussion

Mr. Shane Conneely:

On planning problems, there is a huge number of extant planning permissions available. Very often they are in the wrong part of the country and they are the wrong type of housing as well. There is a huge problem with the strategic housing developments that are offered. Often, they had high density as a whole in the footprint but the high-density part was left to the end, phase 5, and was never actually built. The more profitable things were built initially and the more expensive ones were not.

On why it is so difficult to do it here, after the last crash approximately 100,000 people who were working in the construction sector left. Ireland's construction sector is typically populated by much older people. Our productivity levels have been flat in that area for the past two decades or more. There is a huge systemic issue in construction. The State could do an awful lot in how it procures and what it demands of the sector in terms of upskilling and making it much more effective. We see a lot of talk about things such as modular builds and the advanced manufacturing techniques and that would be excellent - we would love to see this being delivered - however it would have to be done at scale and it is very difficult for the private sector to compete with that.

In continental Europe, the sweet spot for construction is about eight storeys. In Ireland, our skill set is not strong enough in that you need to have extremely tight tolerances to build at that capacity and scale. Often, what we build in Ireland are hand-crafted individual builds with lots of problems to be solved and worked out as we go along. That issue is very much holding us back.

The skills issue is the reason we were so strong on housing. Before I was involved in Chambers Ireland, housing was an issue. Then, it was particularly with the larger companies that were trying to bring in staff from abroad. They would go through the process of recruiting someone, getting the permits and making the offer and the person would back down inevitably at the end because they could not find somewhere to live. This is something that is repeated across the country. A chamber in one city told us that a big build was going in and there might be 500 or 600 jobs in it but they cannot get housing for the planning team to build the factory never mind everything else that will go with it. In another part of the country, a rural part, there was another project that could be a huge employer but if you looked at daft.ie on the day that was announced, 12 houses were available in the entire county. This is the case across the country. The reason things such as Springboard or the apprenticeships are not working in the way we want them to is that there is not the population to flow through them to the jobs market. We are seeing it among our members and our staff. People are realising that they cannot afford to live in Ireland and they will get up and leave for Denmark or whereever. We have a highly mobile population. We are not attractive to people from outside of Ireland. These things come together to create the skills shortage we are dealing with at the moment. Yes, it is great that so many jobs have been generated over the past three years and we are not disputing that. We did refer to Covid, Ukraine, etc., in our statement here today but the challenges are real and profound for this country. While they are difficult now, where we will be in ten years, when those working in the construction age out of it, is what we are really concerned about. We will not be able to bring in 100,000 Polish builders as we did back in the early 2000s because they will be rebuilding Ukraine over the next 15 years.