Construction will be worth €14.4 billion to the economy this year, according to figures just released.

This year’s Euroconstruction Conference in Dublin heard that the industry is growing strongly in the Republic.

According to Annette Hughes of DKM Economic Consultants, its output is likely to grow by 14 per cent this year to €14.4 billion from €12 billion in 2015.

However, she warned that it is still lagging behind the rest of the economy and said that the fact that there are a number of big projects in planning partly explains the strong growth.

House building also remains far behind the 37,500 new homes likely to be needed every year through to 2018.

This year, builders expect to complete 11,000 homes and the forecast for next year is 15,000.

The industry's overall growth will be the fastest in Europe. Poland, which expects a 5.8 per cent expansion and Finland, with growth is likely to be 5.3 per cent, are the next nearest.

Next year

The Republic is likely to beat this year’s performance in 2017, when construction is likely to expand by 17 per cent.

The increase will slip back to 7.4 per cent in 2018 according to current forecasts.

“These strong growth rates reflect an industry that has been in recession for six years until 2014 and needs to catch up with an economy that has expanded by almost 20 per cent in the meantime,” Ms Hughes said.

“With what appears to be a significant number of projects in the planning pipeline, the construction industry prospects seem bright over the coming years, provided the required conditions are in place to facilitate this growth.”

Ms Hughes also noted that that the main risks facing the industry include a slowdown in the EU, which could have an impact on the Republic’s open economy.

DKM is a member of Euroconstruct, the main body for construction forecasting in Europe. The firm's produces the annual Construction Review & Outlook for the Department of the Environment, Heritage and Local Government.