EY report highlights critical role of innovation to ensure a productive and sustainable construction sector in Ireland

• Modern Methods of Construction have the potential to increase the speed of construction of new homes by 30%
• 40% of firms in the construction industry are not currently using any form of automated technologies
• Report makes recommendations on design of a bespoke Construction Technology Centre to address the innovation and technology gap in the industry

Dublin, 8 February 2023: A report launched today at the Next Generation Construction event hosted by the Construction Industry Federation (CIF) and EY highlighted that the construction industry in Ireland is at a critical juncture. The report, commissioned by Enterprise Ireland, entitled, A Detailed Description of Needs for the Irish Construction/Built Environment Sector, finds that the industry needs to prioritise innovation and digital technology to provide the social, economic and productive infrastructure required to sustain economic growth, and to attract foreign direct investment in Ireland.

The report identifies that the Modern Methods of Construction (MMC) approach to building has the potential to increase the speed of new homes through the adoption of innovation by 30%, reduce costs by a potential 25% and advance improvements in quality and energy efficiency.

The report found that 40% of firms in the construction industry are not using any automated technologies, while just 38% stated that there was a ‘great’ or ‘very great extent’ to which their firm was likely to engage in innovation.

Evidence from the survey also found that key barriers preventing firms from implementing new technologies in Ireland include the day-to-day running of the business (59%), a lack of time (51%) and lack of financial incentives to do so (47%).

Produced following research and consultation with firms and stakeholders across the construction industry, the aim of the report was to inform the design of a bespoke Construction Technology Centre to empower industry ownership of the research, development, and innovation processes required to deliver a more sustainable and competitive construction sector.

Speaking at the Next Generation Construction event at EY today, Annette Hughes, Director of EY Ireland Economic Advisory Services and author of the report said, “This report focuses on ‘future proofing’ the construction industry in Ireland by formulating a strategy for the next decade with innovation, digital technology and sustainability at the core.

There are challenges ahead, however, adopting smart construction and digital technology has the potential to transform the construction industry and significantly increase the production of quality, energy efficient new homes.

Modern Methods of Construction (MMC)

While 62% of firms believe that modular construction will be of ‘great importance’ or of ‘very great importance’ in the next 10 years, the EY report found that utilisation of MMC in Ireland remained low with just 7.4% of firms regarding Off-Site Manufacturing/Modern Methods of Construction (OSM/MMC) as being their main activity. Key challenges cited around the adoption of MMC included capital and financing and specialised labour requirements.

Simon MacAllister, EY Ireland Strategy and Transactions Partner added, “The advancements in construction technologies are reshaping the future of the construction industry globally. We need to create opportunities for the industry in Ireland to bring these technologies into Irish projects. Project Ireland 2040, and the various housing initiatives require an effective construction sector which is central to the overall development of our society and economy.”

Technology and Innovation

The use of ‘smart construction’ and digital technology has been proven to increase productivity and the efficiencies of the construction sector by from 10%- 20%, with up to a fivefold to tenfold increase in some circumstances. While 75% of firms said a technology sandbox - a place to explore the latest technologies without having to purchase them - would benefit them, 52% of firms were not interested in Robotics/Automation while 50% were not interested in Materials Prototyping.

Ross O’ Colmain, Department Manager, High Tech Construction and Housing, Enterprise Ireland said, “To fully transform construction enterprises by enabling the adoption of digital technology, it must be noted that true digital business transformation is an ongoing process that requires cultural change. As highlighted in the report, for this Centre to enable Digital Transformation and Innovation across the construction and built environment sector in Ireland, it must focus on developing capability in three core areas – each of equal importance: People, Process and Technology.

Recommendations and Sustainability

The report outlines a total of 11 key recommendations for the Construction Technology Centre and urges it to establish a Sustainability Action Plan within the first 90 days. The Sustainability Action Plan will keep the Centre focused and accountable, by ensuring that every action undertaken is concerned with building a sustainable environment within the industry. This also aligns with survey findings that 80% of firms believe that sustainability and energy will be of ‘great’ or ‘very great’ importance over the next ten years.

Based on the experience in centres across other jurisdictions, and the funding typically allocated to same, the funding for the Centre should comprise a mix of Government, industry, and other sources over time. Centres of this nature will likely require cumulative funding of €10 to €15 million in their initial years.

Sean Downey, Director of Specialist Contracting, Construction Industry Federation, concluded by saying “Post the Covid-19 pandemic, Irish construction stands at a crossroads. We cannot afford to stand still. We have to move to a new level of performance driven by both productivity and sustainability. Some leaders in the construction industry have adopted new technological processes and more advanced construction systems to deliver value to their clients and our vision is for this transformation to be adopted by all players in the industry.”

                                                                                  -Ends-

Notes to Editor

About the Report

The report from EY marked the beginning of a transformation process in the construction industry which is ongoing. Work continued during 2022 with the establishment of a number of initiatives by Government to drive that transformation process, including the establishment of Construction Innovate, the Build Digital Project and the Housing for All Demonstration Park/Housing MMC Centre at Mount Lucas.

Three core areas of focus were recommended for the Construction Technology Centre:

• People - Provision of effective training and accredited training in collaboration with local academics/universities, to improve the capabilities of the construction workforce.
• Process – Develop a good practice process library.
• Technology - Create a technology ‘reference architecture’ for the construction industry. The architecture will serve as a blueprint or roadmap for the technology evolution of the sector, and how economies of scale can be achieved in the model as opposed to firms building siloed solutions within their own environments.

About EY

EY exists to build a better working world, helping to create long-term value for clients, people and society and build trust in the capital markets. 

Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate. Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today.

To learn more download the report here.