Officials at construction union Unite have taken issue with an ESRI report that warned wage increases could hit housing targets.
The ESRI’s latest quarterly economic commentary noted that construction wages have been rising rapidly in recent months compared with the rest of the economy. It said higher costs could impact the National Development Plan.
The report pointed to potential overheating of the sector as it tries to deal with competing demands of house building, retrofitting and infrastructure projects. It said wage increases might partly explain a rise in the number of workers employed in construction, which should be welcomed.
But the report warned that pay rises also point to increased costs. which could impact government building targets.
Increases of 10pc are not being seen in our members’ pockets
Unite regional officer James McCabe claimed the sharp increase in wages outlined in the report does not match the union members’ experiences.
“Increases of 10pc are not being seen in our members’ pockets,” he said.
“These are preliminary estimates based on one quarter and may be corrected over the course of a year.
“I would imagine the figure possibly includes those in senior management roles. It definitely does not reflect increases for plumbers, electricians and carpenters.”
He said minimum wages for the construction industry are set out in a legally binding sectoral employment order. This meant pay rises of just over 3pc for workers in all trades in August.
However, employers are free to negotiate pay rises beyond this.
A Unite spokesperson said Central Statistics Office (CSO) data has shown that construction wage increases have been largely in line with wage increases in the economy over the last few years.
Unite regional secretary Susan Fitzgerald said many construction workers cannot afford to buy or rent the homes they build, and this is contributing to labour shortages. She said sustained wage rises are crucial to prevent a loss of vital construction skills as Ireland grapples with the housing crisis.
The Government has projected that an extra 80,000 construction workers will be needed to meet housing targets
The union noted that there is strong competition for labour. A spokesperson said builders on vital housing projects are competing for scarce labour with commercial developments. She said the Government has projected that an extra 80,000 construction workers will be needed to meet housing targets.
Unite wants a public construction company employing direct labour to be set up.
The ESRI revised its forecast for housing completions to over 35,000 for this year, and reduced its forecast for next year to just under 36,000.“Indeed, it can be seen that construction wage inflation has been rising rapidly in recent months, to a much greater extent than the economy as a whole,” said the report.
“This points to a potential overheating of the construction sector, which is trying to deal with the competing demands of dwelling production, retrofitting and infrastructure. This labour inflation in construction needs to be monitored closely.”