Budget 2014 shadow economy reforms could be worth €250-€500m to the building sector

More investment needed in housing supply 

Start Your Own Business Scheme will help unemployed construction workers get back to work

15th October: The Society of Chartered Surveyors Ireland (SCSI) has welcomed the measures introduced in Budget 2014 to reform the shadow economy and has said that the new incentives for homeowners to use legitimate contractors could bring €250m to €500m back into the industry.

The SCSI said that based on the recent Forfas Strategic Report for the construction sector, the total value of the repairs, maintenance & improvement sector across residential and commercial property in Ireland is approximately €3.7bn. Looking at the UK, where the shadow economy is worth approximately 23 per cent of the home renovations market, the SCSI said that a broad assumption can be made in line with the UK trend in that the shadow economy in the Irish residential market is worth approximately €250m-€500m, based on the fact that the residential sector makes up approximately 50 per cent of the overall repair, maintenance and improvement sector.

SCSI President Micheal O’Connor said “If these new Budget measures are successful in stamping out the shadow economy in the construction sector, there would be substantial improvement in the value of the market and as a consequence, much needed job creation”.

Referring to the lack of supply of family type homes in Dublin and other areas, O’Connor said that while the NAMA proposed investment in developing 4,500 new homes, more investment was needed to support the construction of the types of homes that people actually want.

“We know that people want family type homes such as 3-bed semi’s and not apartments. We need to ensure that these houses can be built to meet the demand or else we will find ourselves in another housing bubble situation which we must avoid”.

Mr. O’Connor also welcomed the Start your Own Business Scheme and noted that it would encourage unemployed construction workers to set up their own businesses and that this would have a knock –on effect of creating other jobs. “Employment in the construction sector is down from 271,000 directly employed at the peak to around 105,000 now and this will give some of those people a chance to get back to work”.