Another year, another construction shutdown

Happy New Year to all. The New Year is normally a time to share greetings and plans for the year ahead, unfortunately, this January is anything but normal. Covid-19 infection rates continue to rise and, from close of business tomorrow (January 8th), all non-essential construction activities will be halted in an attempt to slow the spread of the virus. This shutdown comes despite robust lobbying from the industry and data published in the Irish Times demonstrating that “outbreaks relating to the industry represent 0.6 per cent of all coronavirus clusters since August”. As the CF put forward, the construction industry has done an objectively good job keeping Covid-19 off sites and managing any cases that arise. In fact, the rate of infection amongst construction workers has been considerably lower than in the general population. It is interesting that Ireland is one of only three countries globally to shutdown construction activities as a result of the pandemic. Italy and the US also halted on-site activities during earlier lockdowns. 

A list of exemptions from the construction industry shutdown was released late last night and these include a number of social housing projects that are due to be completed within the next two months, approximately 1,400 homes. Also construction and works relating to the maintenance of water, wastewater and gas infrastructure remain essential, as do health, education and related projects that are relevant to preventing, limiting, minimising or slowing the spread of Covid-19. Significantly, certain large construction projects in the exporting/FDI sector will be permitted to continue throughout the shutdown, dependent upon set criteria, according to an article in the Irish Times this week. Thankfully, a more practical approach was taken by Cabinet this time around, with works on private homes that are “practically complete” and scheduled for habitation by 31 January 2021 – including snagging and essential remediation work – continuing so that the new homeowners will be in a position to access their homes. It is worth noting that heating, water, broadband and electricity installations will also continue throughout this period. 

The CIF estimated that the construction shutdown in early 2020 resulted in 5,000 fewer new homes being delivered to the market last year, however, it must be noted that is unclear whether this figure refers to the weeks of shutdown, or to the overall productivity losses as a result of the new HSE/CIF safety protocols. In any event, a prolonged period of shutdown in 2021 will inevitably impact on the delivery of badly-needed new homes this year too. 
Finally, residential investors are reminded that existing tenancy protections remain in place during the period of the 5km travel restrictions.


 

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group