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TAKING THE LONG VIEW IRELAND ANNUAL REVIEW 2019 INDUSTRY SPOTLIGHT Taking stock of the island of Ireland’s 2018 construction industry performance and predictions for 2019 and beyond SIX STEPS TOWARDS IMPROVING INFRASTRUCTURE RESILIENCE Resilience preparedness and how to manage potential future threats OUR FUTURE CITIES Where investment is needed to ensure our cities support sustainable growth
FOREWORD
TAKING THE Welcome to our new look Ireland
Annual Review 2019. As a company
on housing, economic growth and
international market changes and
LONG VIEW
committed to building a better world, shocks in the Republic of Ireland
we’re always looking to improve and (ROI). We’re also delighted to include
strengthen how we do things from an interview with Belfast City Council
our delivery of infrastructure projects Chief Executive, Suzanne Wylie,
to the research we conduct and who offers her insight into foreign
conversations we share with colleagues, investment, the changing face of retail
clients and organisations. Our goal is and smart city initiatives in Northern
to unlock the transformational change Ireland (NI).
and innovation required to move the In this year’s industry spotlight
industry forward. commentary we take stock of
This year, to get a better the island’s 2018 economic and
understanding of the long view of the construction performance and reveal
construction industry in the island of the changes we see ahead, including our
Ireland, we’ve changed things up a little prediction that in 2019, tender price
by asking senior industry professionals inflation in NI will increase by around
to tell us what their biggest challenges 2.5 per cent and moderate slightly to an
will be over the next 10–20 years. We average of six per cent across ROI. We
also wanted to know how prepared they also anticipate construction industry
feel to respond. Our survey results on output in ROI to grow by 20 per cent in
the following pages reveal an industry 2019 to €24 billion and by six per cent
that is optimistic, with 77 per cent of to £3.2 billion in NI.
respondents anticipating growth. The By taking a long view of the
results also indicate an industry that is construction industry now, we can speed
feeling the impact of a deepening skills up the development of innovations
shortage, political upheaval and lack of and ideas needed to design and build
public funding. tomorrow’s infrastructure, buildings and
Furthering the long view places that respond to the challenges
conversation, we’ve included thought ahead. By keeping the conversation
leadership articles written by AECOM going and by working together we’ll
experts addressing a number of key be better prepared for the future and
issues affecting the industry as it moves able to make the most of tomorrow’s
towards becoming more sustainable, opportunities. Enjoy this year’s read.
resilient and digitally-enabled. We We look forward to working with you
hear from Mark Gantly, President of to build a more resilient future for
the American Chamber of Commerce construction in the island of Ireland.
Ireland, about the topic of foreign
direct investment, and interview the Ireland Leadership Team
economist, Jim Power, who comments
Cover image
Image of the island of Ireland captured by a NASA satellite
Image credit: Jacques Descloitres, MODIS Rapid
To read a digital version of our Ireland Annual Review 2019 visit:
Response Team at NASA GSFC (Wikimedia Commons) ireland.aecom.com
CONTENTS
4 8 11 14
EXECUTIVE SUMMARY AND OUR FUTURE CITIES FDI AND EMBRACING AN INTERVIEW WITH …
KEY FINDINGS The island of Ireland’s CONSTANT CHANGE Suzanne Wylie, Chief
A snapshot of our survey population is growing. So ROI remains one of the Executive, Belfast City
results from senior industry how do we ensure our main fastest growing economies Council, who shares her
professionals, revealing key cities support sustainable in Europe, with US thoughts on the long view
findings around expected growth? Landscape business investment a big for Belfast, commenting
future industry growth, architects Paul Tully and contributor. Mark Gantly, on the Belfast City Region
challenges ahead and Edward Frampton suggest President of the American Deal, the changing face of
preparedness for the future. where investment should Chamber of Commerce retail and the opportunities
be targeted to ensure our Ireland, offers four steps technology can bring to the
cities remain affordable, to ensuring the future capital city.
vibrant and resilient places success of foreign direct
to live and work. investment in ROI.
16 20 24 28
SIX STEPS TOWARDS IMPROVING INDUSTRY SPOTLIGHT THREE WAYS TO REDUCE WATER AN INTERVIEW WITH …
INFRASTRUCTURE RESILIENCE What lies ahead for ROI INDUSTRY ENERGY USE Economist, Jim Power,
Extreme weather and and NI’s construction Water companies are who shares his insight into
cyber-attacks threaten industries? Can we expect hugely dependent on ROI’s future economic
our transport networks. growth over the next 10–20 energy to deliver their outlook, providing expert
Transport planners John years and what changes services, costing them a commentary on potential
Humphreys and Beatriz might we see? We take lot of money and making challenges to delivering
Martinez Pastor discuss the stock of 2018 construction it harder to meet stringent Ireland 2040, VAT and
importance of resilience industry performance water industry regulations. housing supply and ROI’s
preparedness and how to across the two regions and In response, water industry resilience to withstand future
manage potential threats make some predictions specialist David McCune shocks such as international
in six steps. around output and tender looks at opportunities market changes.
prices for 2019 and beyond. for water companies to
make their processes less
energy hungry.
30 34
HOW TO BUILD COLLABORATIVE ACKNOWLEDGEMENTS
AVIATION TEAMS Learn about our
Air travel is booming contributors’ expertise
globally, requiring airports and experience plus
to be improved and contact details.
expanded. Transportation
specialist Derval Cummins
and aviation programme
manager Joe Glowacki
suggest six steps to
achieving the level of
collaboration required
to deliver complex
aviation infrastructure
projects successfully.
3
TAKING THE LONG VIEW
Executive summary
AECOM’s survey results and thought leadership-led
discussion reveal and respond to some of the big OUR SURVEY RESPONDENTS
issues facing construction across the island of Ireland.
Public sector building
Despite complexities and changes ahead, we can
report that the general outlook is one of positivity, with
a commitment from industry professionals to keep 34%
building the resilience required to forge ahead.
Commercial
24%
C
onstruction professionals The industry will need to continue
across the island of Ireland embracing innovation if it is to
see their businesses growing respond and adapt to the digital,
on average by as much as a environmental and societal changes Civil infrastructure
quarter in the coming two demanding more efficient project
decades. That’s one of the key
findings in our annual survey.
Amid such optimism, and despite
delivery. However, it is clear from
our respondents that more needs to
be done, with almost half believing
13%
differences around planning, governing they are only ‘average’ at adopting
bodies and tax, among other factors, innovative delivery models. It is Residential
we see that ROI and NI face similar also clear our respondents see
challenges. These range from population
growth and skills shortages, to
increasing resilience and environmental
Dublin as the city across the island
making the most progress towards
delivering future-ready, smart civil
11%
and cyber threats. infrastructure, with Cork and Belfast
So, to the specific challenges and how following behind. Water
the industry is preparing to meet them. In response, and to ensure our
7%
With a greater desire for regional industry is sustainable and resilient in
connectivity, the rapid introduction the long term, we believe we need to
of smart technology and continuing deliver projects more collaboratively,
population growth, industry and design our cites to be smarter and more
governments need to adapt. However, connected and affordable; invest in Other
many respondents told us they felt that more efficient processes; maintain and
the industry is not evolving fast enough strengthen our FDI offer; and embed
to meet these changing needs.
The availability of people with the
right skills, too, remains a significant
resilience into infrastructure design.
Achieving these will take time, effort
and mapping out a shared vision for
5%
challenge not only across the island but the future between communities and
Airports
the world. And while most respondents private and public sectors that sets out
see engineering as the most crucial skill the best route forward. The long view
required to keep the industry moving
forward over the next 10–20 years, only
15 per cent feel they are fully prepared
starts now.
3%
to source the right talent.
Industrial
3%
Survey results compiled from responses from 70 senior construction industry professionals from across
the island of Ireland.
4
Key findings
AN OVERALL POSITIVE OUTLOOK
ROI’S ABILITY TO DEVELOP AND ATTRACT
TALENT IS AT LEAST AS IMPORTANT
Almost eight out of 10 respondents TO EMPLOYERS WHO WE SPEAK TO,
anticipate their business to increase AS A SPECIFIC CORPORATE TAX RATE.
77%
in 2019, with almost half of them THE ATLANTIC ECONOMIC CORRIDOR
expecting a growth rate of 5-25 per STRETCHING FROM CORK THROUGH
cent. However, almost half of our LIMERICK, SHANNON AND GALWAY WILL
respondents see resources as the most BECOME A WELCOME COUNTERBALANCE TO
significant challenge in growing their DUBLIN AS INFRASTRUCTURE INVESTMENT
business over the next five years. IS DELIVERED.
—
SURVEY RESPONDENT
SKILLS REMAIN THE KEY CHALLENGE AHEAD
Top three factors impacting the
delivery of major projects in the
40% 33% 27%
next 10–20 years.
Skills/talent shortages Lack of public funding Political change/upheaval
Almost two thirds believe they are Funding shortages and complex
very good to excellent at planning, procurement approaches are the
63% 57%
integrating and collaborating with top reasons why projects fail to ‘get
project partners on project delivery. off the ground’.
Engineering will be the most Only 15 per cent feel fully prepared
important skill/talent to the to meet the challenge of sourcing the
23% 15%
industry in the next 10–20 years. right skills/talent.
5
TAKING THE LONG VIEW
MORE INNOVATION IS NEEDED
Dublin is ranked as the city making the most progress towards delivering future-ready,
smart, civil infrastructure. Cork and Belfast follow behind with similar results.
49%
Belfast
24% 27%
52%
Cork
23% 25%
80%
Dublin
20%
Innovatory Stagnant Backwards
Over half believe the industry is not 43 per cent agree their organisations
evolving fast enough to meet the are only ‘average’ when adopting
56% 43%
changing needs of society. innovative delivery models.
THERE IS A NEED TO MOVE AWAY FROM THERE HAVE BEEN CONTINUOUS CHANGES
A SINGULAR ENGINEERING FOCUS ON TO THE ROI PLANNING SYSTEM RESULTING
PROJECTS TO AN UNDERSTANDING THAT IN CONFUSION, INERTIA AND DELAYS,
SUCCESSFUL PROJECTS ARE MULTI- CREATING WHAT IS A DEFUNCT SYSTEM.
DISCIPLINARY, COLLABORATIVE THERE IS A NEED TO SCRAP THE EXISTING
AND RELIANT ON SUCCESSFUL SYSTEM AND COME OUT WITH A NEW,
STAKEHOLDER ENGAGEMENT. INNOVATIVE, COHESIVE AND EFFICIENT
— MODEL FOR ALL SIDES.
SURVEY RESPONDENT —
SURVEY RESPONDENT
6
PREPAREDNESS FOR THE FUTURE
Looking ahead to future challenges, only half of our survey respondents say they feel WE NEED TO BEGIN TO PLAN FOR SIGNIFICANT
prepared enough to source the right talent. Fifty per cent also feel unprepared to manage POPULATION INCREASE IN THE NEXT 20
future cyber threats. Meanwhile, some 38 per cent believe they are fully prepared to YEARS. RIGHT NOW WE ARE PLANNING FOR
reduce their impact on the environment. NOW, NOT FOR THE FUTURE.
—
SURVEY RESPONDENT
15%
Sourcing the right
skills/talent
50% 35%
27%
Attaining necessary
funding
45% 28%
35%
Sourcing the right
materials (on time and 48% 17%
within budget)
35%
Navigating complex
regulation
30% 35%
35%
Delivering complex,
multi-partner projects 30% 35%
at pace
38%
Reducing/limiting
environmental impacts
35% 27%
27%
Adapting to/adopting
disruptive new 44% 29%
technologies
23%
Managing the
cyber threat
31% 46%
Fully prepared Prepared Not prepared
7
TAKING THE LONG VIEW
OUR
FUTURE
CITIES
Populations across the island
of Ireland are expected to grow
significantly over the coming
20 years. Landscape architects
Paul Tully and Edward Frampton
look at where investment must
be prioritised in our main cities to
ensure they support sustainable
growth and remain attractive and
affordable places to live, work
and visit.
T
he island of Ireland’s main over two million, with Belfast alone
cities from Belfast and looking to support an extra 66,000
Dublin to Cork and Derry- people and 24,000 jobs by 2035,
Londonderry are growing according to the city’s draft Local
fast. According to Ireland’s Development Plan 2035.
National Planning Framework, Faced with similar challenges,
an extra one million people will be including housing shortages, we need
living in ROI by 2040, with the need for to make the most of development
around 660,000 extra jobs. Similarly, and redevelopment opportunities
NI’s population is set to grow by in our cities to ensure they remain
around 4.2 per cent by 2026 1, to just sustainable, affordable, vibrant,
8
resilient and well-connected places to a cultural shift away from cars to more
live, visit and work. To ensure our cities sustainable transport will enhance A VIBRANT NEW CITY-
are fit for the future, we believe urban
investment needs to be targeted. Here,
overall city resilience by reducing
carbon emissions and air pollution
A CULTURAL CENTRE DISTRICT
SHIFT AWAY Tivoli Docks, Cork
we suggest five opportunity areas: while improving health. FROM CARS
TO MORE A major transformational project for
Sustainable, active transport Spaces for people SUSTAINABLE Cork, Tivoli Docks is a 61-hectare
People need to be able to move more We need to create spaces that favour TRANSPORT WILL site along the north quays of the
efficiently within, to and from our people and city life, support wellbeing ENHANCE CITY River Lee directly east of Cork city
cities if they are to remain accessible and provide cultural and sporting RESILIENCE. centre. With over three kilometres
and attractive places to live — and to opportunities. The redevelopment of — of waterfront to the south, a rolling
support social cohesion and economic Cork’s North, South and Tivoli Docks hillside residential landscape to
growth. Recent projects that support is a good example. We’re currently the north, as well as key transport
improved connectivity include Belfast’s developing masterplans for the connection opportunities along
Glider bus system, which moves people sites, imagining what the city’s vast both the N8 road and the Cork-
in and out of the city from west to east, waterfront docklands could look like Midleton rail line, the site possesses
running at seven to 10-minute intervals. over the next 10–50 years. With the a unique and exciting development
Meanwhile, Dublin’s Metrolink project capacity for 10,000 residential units, opportunity for Cork and its region.
is included in the National Development commercial, leisure and office space,
Plan 2018–2027 as a key solution to the scheme has the potential to add
connect Swords and Dublin Airport with unique open spaces and high-quality
the city centre, improving accessibility public realm to the city.
and journey times for a potential 50 To create the vibrant, open, green
million passengers per year. community spaces and amenities
Crucially, transport infrastructure needed to support growth and attract
needs to work with the form of our people, we need to create healthy
cities. This could be achieved through streets and secure spaces that focus on
designating car-free areas and through people and that are accessible for all.
multi-modal transportation systems Streets need to be recognised as public
that link driving, public transport and places, with parks and open spaces
active transport modes such as walking designed for city life while also catering
and cycling to wayfinding. Encouraging for the needs of wildlife and ecology.
Aerial view of Tivoli Docks site
Image credit: Rob O’Connor
Tivoli is unique in that it has all
the ingredients to become a
best practice urban regeneration
project and a model in sustainable
development that meets national,
regional and local objectives,
creating a vibrant and inclusive
community that supports low
energy use and low emissions in
accordance with climate change
adaptation principles. AECOM’s
multidisciplinary team is helping
Cork City Council formulate its
vision for the site, which includes
a sustainable new city district
with the capacity to deliver 4500
residential units with a population
of 12,000 residents, towards
the development of a Local
Development Plan.
Glider bus system, Donegall Square, Belfast
—
1 www.belfasttelegraph.co.uk/news/northern-ireland/northern-ireland-population-to-hit-almost-2m-by-2026-with-25-rise-in-people-aged-65-and-over-36849262.html
9
TAKING THE LONG VIEW
Smarter services
Investing in ‘smarter’ ways of doing
PUTTING LIFE BACK INTO A CITY’S HEART
Belfast restore and revitalise project
things will be crucial to solving future
problems, such as the use of real time Following the fire in Primark’s Bank Additional lighting and window dressing
information to improve connections and Buildings in the heart of Belfast city, is helping to brighten areas which would
transport links. Our cities need to plan multiple streets were cut off as a safety previously have been underused.
what “smart” means for them, identify cordon surrounded the damaged
which technologies they already have structure. As a result, traffic has been Family orientated attractions, including
and bring resources and people together. restricted, footfall in the area has a temporary stage, outdoor cinema,
The All Ireland Smart Cities Forum reduced dramatically and employment artwork and street entertainment have
is a great cross-border initiative has been affected, with an estimated been added at various locations to
bringing together city officials from £3 million a month economic impact. revitalise the area and offer additional
Belfast, Dublin, Cork, Limerick, Galway, reasons to visit the city centre. Longer
Waterford and Derry-Londonderry to AECOM was asked by Belfast City term proposals include permanent
share, learn about and advance smart Council to look at ways to encourage seating installations, pocket parks
city programmes. Meanwhile, Belfast’s footfall back into the city and help local and projections on vacant buildings to
20 ‘Smart Hubs’ rolled out across the traders adversely affected. As a short- provide attractive areas to visit.
capital city in October 2018, created term measure we installed AstroTurf
by London company Pulse, provide with colourful boxed seating areas and The fire was an unprecedented shock
free Wi-Fi, mobile phone charging and planting along the closed roads and to the city and required many parties to
public information messages, as well bus lanes. Market stalls along Donegall come together rapidly to discuss options,
as data-capture services monitoring Place have provided a temporary place with AECOM liaising not only with council
footfall and pollution levels. They’re of business for traders who have been departments and traders, but also Market
the first such hubs in the UK and also relocated for safety. Place Europe, Cathedral Quarter Trust, DfI
provide an instant link to emergency Roads, and other statutory bodies.
services and a defibrillator.
Faster, more innovative
housing construction
The draft Belfast Local Development
Plan includes plans to create new
neighbourhoods, setting aside land
for 31,600 homes between 2020–2035.
ROI meanwhile aims to provide 40
per cent of its future housing needs
by building and renewing existing
stock in built-up areas, including its
cities. So how do we hit these targets
affordably and sustainably?
We need to deliver homes faster
and cheaper through innovations
such as off-site manufacturing, where
components are built in factories
to excellent design standards with
programmes delivered in around half Boxed seating area near Primark Bank Buildings, Belfast
the time of traditional construction,
significantly reducing costs and
materials waste while increasing There’s also the potential for more are well integrated with high quality public
energy efficiency. efficient use of existing city centre buildings realm design. Placing greater emphasis on
We also need to make housing more such as converting upper floors into introducing sustainable drainage systems
accessible. Innovations in flexible apartments, helping to bolster city centre (SuDS) such as green roofs and permeable
housing present an opportunity for economics and sustainability of the high paving into new developments will not only
policymakers to progress important street. Finally, good integrated design should improve flood resilience but also an area’s
urban policy priorities. Housing units ensure the interface between living space visual appeal.
with smaller footprints inherently lead and city infrastructure is complimentary, Cork, a city built within the River Lee,
to increased density and may promote with the transition between public and has a street structure that reflects the river
more efficient and sustainable use of private space carefully considered. that flows beneath it. Our work in the South
resources. While per-square-foot rents Docks reimagines this 250-acre zone as a
in many existing micro-units exceed Resilience to shocks sustainable resilient city district that has
that of their larger counterparts, With all of the island of Ireland's major inbuilt flood resilience through a network of
per-unit rents can be lower, providing cities being coastal, designing for resilience open spaces that positively act as flood water
more housing within ranges that more against flooding is fundamental, but we storage while also defining the character of
people can afford. must ensure that engineering solutions the district.
10FDI
AND EMBRACING
CONSTANT CHANGE
With a skilful workforce and a competitive,
pro-business economy, ROI retains its crown as
one of the fastest growing economies in Europe.
And US business investment is a particularly
dynamic area and major contributor to the
economy. So, what does it take to continue
this success story? Drawing on his extensive
experience and offering four steps for the future is
Mark Gantly writing in his role as President of the
American Chamber of Commerce Ireland.
F
or many people, foreign direct
investment (FDI) is seen as
a fairly recent phenomenon.
But it’s now more than a
century since large American
corporations looked across the
Atlantic to extend their operations.
In 1917, and choosing Cork as its first
purpose-built base outside the US,
Henry Ford & Son set up an ambitious
manufacturing plant and was soon
turning out tractors and Model Ts by
the hundred. Mark Gantly
President of the American Chamber
Henry had a strong Irish pedigree —
of Commerce Ireland
his father had moved to the US in the
mid-19th century during the Famine. To
this day, a replica Model T Ford can be
found in the centre of Ballinascarthy and financial services. They directly
in west Cork where the Fords farmed employ more than 155,000 people in
for more than 300 years. In the ensuing the ROI economy, and there’s at least
century since Ford’s return, ROI has a further 100,000 employed in support
opened its doors to dozens of US and supply chains. This accounts for
corporations from Pfizer to Facebook around 20 per cent of all employment
and Intel to Dell. in ROI and, with a US$446 billion total
According to figures from the investment, almost 70 per cent of all
American Chamber of Commerce foreign direct investment.
(AmCham) Ireland, there are more What many people don’t often
than 700 US companies with bases acknowledge is that, like the Ford story,
in ROI. The emphasis is toward this is a two-way street. There are more
innovation and technology in than 700 ROI companies exporting to
industries such as information and the US, and there are 100,000 people
communications, biotechnology, employed by ROI affiliated entities in
pharmaceuticals, medical technologies 50 US states.
11TAKING THE LONG VIEW
US Investment ROI investment
in ROI in the US
ROI is the gateway to Europe The value of research
for many US companies accessing and development
European international markets spending by US affiliates
of majority ROI owned firms
12% of all US investment into
in 2015 was $3.9 billion
Europe goes to ROI
+700
US companies in ROI
+700
ROI companies exporting to the US
Over 400 ROI companies with operations in the US
+155,000
Direct employees of US companies in ROI
+100,000
People employed by ROI affiliated entities
+100,000
Indirect employees supported by US companies in ROI
+2,000
Locations in all 50 states across the US
+$446bn
Total investment stock of the US in ROI
+$85.5bn
Total investment stock of ROI in the US in 2015
Statistics from the American Chamber of Commerce 2018 US-Ireland Business Report
The FDI story so far move ahead at a pace and there is REGARDLESS with greater levels of responsibility.
My own employer, Hewlett Packard, the uncertainty around Brexit. It’s OF THE SECTOR, Regardless of the sector, the major
is now close to celebrating its first interesting to note that there was a ACCESS TO TALENT factor that will drive investment
half century in ROI. During this time, big push around FDI in the early 70s WILL BE THE in the future is access to talent.
we have seen FDI grow significantly. when ROI was preparing to join what MAJOR FACTOR That talent, both homegrown and
Investors have benefitted from the was then the European Economic DRIVING FUTURE international is increasingly mobile.
great pool of young and well-educated Community in 1973. INVESTMENT. For them to choose ROI as their long-
talent, from the fact that ROI is an We have weathered much change — term base will be driven largely by
appealing place to live and provides since then, and will surely weather lifestyle factors — quality of housing,
easy access to European markets, more, so we know that the route transport infrastructure, healthcare
and from the pro-business economy to continued success is to always and education. In addressing these
bolstered by a corporation tax rate anticipate change, then be prepared challenges, the AmCham's view is
of 12.5 per cent (since 2003), and tax to be flexible and adaptable. Based on that speed of execution, not quality of
treaties with 72 countries. To cap it all, my experience, here are some ideas for vision, will drive our future success.
the ROI economy grew by 7.3 per cent existing and prospective investors in
in 2017, with GDP expected to grow by navigating the way ahead.
4.7 per cent in 2018 and 3.9 per cent
in 2019 according to the Economic The FDI long view
and Social Research Institute’s latest ROI’s track record of success in FDI
quarterly commentary. is the envy of many. That success is
not just in attracting new FDI, it’s
Moving with the times also in retaining and transforming
But, of course, times are constantly the installed base. The inclination
changing and business needs to of existing companies is to do more
respond. Technology and innovation here, also to entrust the ROI entity
12FOUR STEPS TOWARDS THE FUTURE
1/ 2/ 3/ 4/
KNOW YOUR LOVE CHANGE INVEST FOR IMPROVE QUALITY
NEIGHBOURS GROWTH OF LIFE
Whether it’s pharma It’s true of all business, but This is a message to FDI In the past five years we
in Cork, IT in Dublin or especially true of FDI — you companies, infrastructure have seen a significant
‘med tech’ in Galway, FDI always need to adapt to providers and particularly change in the priorities
companies have tended to survive. Transformation to government. Economic for FDI companies.
form clusters. And there’s a is the route to absorbing success and growth are Their attention has shifted
great deal that’s positive to change, adapting and then inextricably linked to towards attracting and
be said about the power of a forging ahead. US FDI in ROI infrastructure. These range retaining the best talent.
critical mass of like-minded is remarkably resilient. That from reliable and affordable To retain this talent we
ventures. For existing can be largely attributed to water and power to better need to look to our cities
companies there are its ability to anticipate and broadband, roads and to invest in improving
opportunities to be found adapt to change. public transportation. ROI quality of life — and that’s
by partnering with start- has made great progress everything from new
ups or academic research in many of these areas, but homes and better office
groups that are prominent there is a lot more to do. buildings to leisure and
on the scene. For incoming We have many of the right cultural amenities. At
investors, you know things mapped out in the present around 17 per
you’ll have a ready-made Project Ireland 2040 plan, cent of the total population
community and support but we need to execute. was not born in ROI, in
network. While AmCham US multinationals that
has traditionally been seen proportion rises to 27 per
as the voice of the large FDI cent. Given the diversity
companies, it is actually the of the workforce, we also
emerging FDI sector that is need to put inclusion at
the fastest growing part of the centre of our agenda
our membership. — it will be a major
differentiator for attracting
FDI in the future.
FOR EXISTING COMPANIES THERE ARE
OPPORTUNITIES TO BE FOUND BY PARTNERING
WITH START-UPS OR ACADEMIC RESEARCH
GROUPS. INCOMING INVESTORS KNOW THEY’LL
HAVE A READY-MADE COMMUNITY AND
SUPPORT NETWORK.
13TAKING THE LONG VIEW
Suzanne Wylie
CHIEF EXECUTIVE, BELFAST CITY COUNCIL
INTERVIEWED BY AECOM'S TREVOR LEAKER, REGIONAL LEADER, NI, AND JODY WILKINSON, PROJECT DIRECTOR
Suzanne has been Belfast City Council Chief Executive since July 2014. She is the council’s first female chief executive
and leads its City Plan, the Belfast Agenda 2035, which focuses on inclusive growth and connecting neighbourhoods and
people to the opportunities it creates. Belfast City Council is the largest council in NI, with 2,700 staff, and is responsible
for providing services to the city’s 333,000 people.
Q UK Chancellor Philip
Hammond’s commitment
of £350 million towards the
having good infrastructure in place
and promoting the right narrative,
we will continue to attract FDI. We
Q Many European cities are
becoming increasingly car-
free. What more can Belfast do
WE NEED TO SOLVE
Belfast Region City Deal in the are also focused on supporting the REAL CITY to reduce congestion?
Autumn Budget is great news. growth of small businesses as well PROBLEMS USING
What will the investment mean
for the Greater Belfast area?
as start ups. Just take cyber security
for example. We are now a well-
recognised hub across the island.
TECHNOLOGY
RATHER THAN BE A The recent investment in public
transport was absolutely needed.
The Glider operates west and east,
TECHNOLOGY LED.
A The deal has the potential to
create up to 20,000 jobs and
increase productivity. It focuses Q Belfast City Council is actively
encouraging more city-centre
— but one of our City Deal projects is
to run it north and south, and out
beyond the city boundaries. The
on our growth sectors: FinTech, living. What is needed to make Transport Hub and its ability to
advanced manufacturing, health the plan work? handle many more passengers will
and life sciences, cyber security, be another game changer.
data analytics and tourism and
creative industries. The money
will be invested in our wider
A Any successful city has people living
in the heart of it. We have long-
established communities in Belfast,
Parking also needs to be smarter.
Too many people circle the city
infrastructure, allowing these which we need to embrace and help centre looking for a space with
growth sectors to really flourish. flourish, but we also need more no smart technology to show
For example, we are working housing and more people living in availability. We really need to
alongside universities to create the city centre. reduce the number of workers
research and development hubs for parking in the city all day. That’s
each of these sectors and on digital The Belfast Local Development Plan why public transport needs to be
projects that will create smarter (LDP) 2035 talks about 8,000 new top quality, good value and very
districts and better connectivity homes in the city centre itself. The timely to get people in and home
across the region. The deal will also public sector can help by making quickly from more strategic places
include tourism and regeneration space available and taking a focused like ‘park and ride’ facilities.
projects, along with employability approach to planning.
and skills programmes to create the Our cycling network is making
right pipeline of jobs. We also need the private sector to great strides, but we need to join it
co-invest alongside us. The LDP is up more. We’re adding more Belfast
Q With the lack of a Stormont
Executive, how can the council
help restore foreign investors’
targeting a total of 32,000 new homes
in Belfast over the next 20 years. We
want to retain more of our young
Bikes and reassessing station
locations so they’re in the best-used
areas. The city also needs to be
faith in NI? people and bring back those who more walkable.
went to university elsewhere; that’s
A We continue to see new companies
investing in NI, with 75 per cent
of FDI companies reinvesting and
a real challenge and why focusing on
creating good jobs is really important.
We also have 15,000 students coming
Q Retailers are struggling across
all cities and our High Streets
are going to look very different
expanding. Certainty is a key issue into the city through the new Ulster in 10 years. With this in mind,
for businesses setting up here and University campus. Alongside and considering the aftermath
some have looked to the council Queen’s students, that’s going to of the Bank Buildings fire, how
as a stable governance system, still create a great dynamism within the is the council addressing the
making decisions, still supporting city. Our regeneration plans are changing face of retail?
investment and co-investing to ambitious but need stress-testing
make projects a reality. Alongside
Invest NI, we help FDI companies
set up their businesses and source
against what is currently happening
in the heart of our main city after the
Bank Buildings fire. It’s important we
A A fire at a heritage building in a
city centre crossroads has led us to
rethink how Belfast should up its
employees. If we really focus on have a strong city, for the good of the game as a vibrant commercial and
tying down the skills available, entire region. living space.
14100 RESILIENT CITIES Q We’ve been meeting with your
Smart Belfast team, looking at
IF WE LOOK AT REALLY
PROGRAMME (100RC) the opportunities technology
can bring to Belfast. How do
SUCCESSFUL PLACES WHERE
The 100RC supports 100 cities
globally in tackling issues of
you see technology improving
the city?
RETAIL WORKS BEST, THERE’S
globalisation, urbanisation and A MIX OF ATTRACTIONS,
climate change by developing
a resilience strategy. A We need to solve real city
problems using technology rather WHICH CAN INCLUDE VISITOR
AECOM is a key strategy
than be technology led. Think
of car parking, live transport FACILITIES, OFFICES, AN ARTS
partner for the programme,
working with a number of the
feeds, tourism footfall and waste
management — these areas use AND CULTURAL SCENE, AND
cities to develop processes
as part of their resiliency
technology strategically and that’s
the approach we’d like to take. We INCREASINGLY, RESIDENTIAL
strategies. So far we have
worked directly with 30 cities
want to have a smart district in the
city and have been working with SPACE — THAT’S WHAT
including Rome, Christchurch,
Melbourne, San Francisco,
Belfast Harbour, which wants a
smart port to improve logistics.
WE REALLY WANT TO SEE
Berkeley, Oakland, Bangkok,
Jakarta and Quito.
This approach could be developed
out to the city centre too.
IN BELFAST.
—
We want to be 5G enabled to
improve connectivity and also
to test new technology. Dublin’s
In the short term we are focusing Smart Docklands is promoted as
on supporting traders with a the Europe’s most connected two
financial support package and square kilometres, attracting some
getting the cordon taken back as big technology companies to invest.
quickly as possible. Medium term For me it’s about joining it all up to
is about driving footfall back into see smart technology adding to an
the centre. Longer term, if we look overall city strategy.
at really successful places where
retail works best, there’s a mix
of attractions which can include
visitor facilities, offices, an arts and
cultural scene, and increasingly,
residential space — that’s what we
really want to see in Belfast. People
come into the city centre for a
wider experience and shopping is
only part of this.
We also joined the 100 Resilient
Cities Programme. This allows us
to tap into expertise right across
the globe and demonstrate how we
need to be capable of responding to
the quick shocks and longer-term
stresses we may face.
Suzanne Wylie
Chief Executive, Belfast City Council
156
TAKING THE LONG VIEW
STEPS TOWARDS
IMPROVING
INFRASTRUCTURE
RESILIENCE
The island of Ireland's transport networks and
services are increasingly vulnerable to the impacts
of extreme weather events and human attack and
could benefit from increased protection, write
transport planners John Humphreys and
Beatriz Martinez Pastor.
16U
npredictable weather events building confidence in the future for
are having a negative impact on all of us.
the economy. This was shown While it’s not possible to predict or
during Storm Emma in February avoid all hazards or threats, they can
2018 when the majority of be managed. A strong resiliency plan
WAITING IS NOT ROI’s transport network was
shut down for almost a week. This
can reduce the risk and impact of an
event and speed the recovery, which
AN OPTION — caused significant losses for the ROI
economy from business to education,
dramatically reduces the cost in terms
of physical, social and economic loss.
START SMALL OR and restricted access to services. Since
extreme weather events like Storm
In building a plan, we suggest six steps
towards improving resilience.
START BIG — BUT Emma are more likely to occur due to
START NOW. the influence of climate change, it is
increasingly important for the island of
1/ ACT NOW
Ireland to develop strategies to prepare There is no time like the present.
— and mitigate their effects. Whether creating new infrastructure
At the same time, as the world systems and networks or upgrading
becomes digitally connected, our existing assets, the earlier resilience is
exposure to hacking increases and considered, the more effective, efficient
cyber-attacks can impact more people. and economical the solutions will be.
So resilience preparedness should not Ideally, discussions start at concept
simply consider the impact of extreme stage, making it possible to achieve
weather events, but also the possibility resilience and security by design
of network disruption from cyber crime. throughout the project.
Connected problems require
converged solutions
2/ THINK BROAD
The changing urban and infrastructure An effective resilience plan must
landscape has created the need for integrate across the physical and logical
holistic, industry-wide solutions (also known as digital) domains. For
for identifying and managing risks. example, most recent cyber-attacks are
Resilience is not a one-dimensional or described as ‘blended’ attacks meaning
static issue and a significant disruption they exploited vulnerabilities both in the
will exploit any existing vulnerability. physical and digital domains. The same
For these reasons, and because we systems approach also applies to major
do not know the nature of all future weather events such as hurricanes.
threats, it is important that we build In the US, one of the major issues in
adaptive security and resiliency into restoring power following Hurricane
infrastructure as early as possible, Sandy was the inability to connect to
ideally from the start. critical data centres necessary to restart
For this reason, three phases of sections of the grid.
analysis are required when considering
resilience:
// Before the event: develop measures
3/ TEAM UP
prior to the disruption to reduce the In the same way that disaster has
negative impacts. no respect for borders, effective
resilience must cut across all silos and
// During the event: take steps to
boundaries. From logistics departments
protect infrastructure during
and IT to asset and facility managers,
the disruption.
everyone needs to participate and
// After the event: develop mitigation collaborate in finding the best and most
strategies to achieve a swift recovery. innovative solutions.
Turning adversity into
opportunity 4/ PRIORITISE
As any risk manager will attest, risk
cannot be eliminated altogether. With broad agreement that spending on
However, transportation organisations resilience protection is an investment,
can become better at planning for infrastructure owners must first identify
adaptation and mitigation strategies. and prioritise their critical assets and
The goal should be to manage risk essential functions. This is crucial to
effectively and to understand at what ensuring that the limited resources
Queen's Bridge and Queen Elizabeth II Bridge level to mitigate, transfer or even are being spent to protect the highest
over the River Lagan, Belfast accept some risk. Building plans and priority assets and processes.
preparedness needs to be part of
17TAKING THE LONG VIEW
INCREASING YORK STREET INTERCHANGE
FLOOD RESILIENCE
York Street Interchange is a major However, the risk of flooding
junction in Belfast linking the city’s associated with various underpasses
three busiest roads: Westlink, the proposed within the scheme linking
M2 and M3. The Interchange lies strategic traffic would not only
within the coastal floodplain of threaten road users but also carry the
Belfast Lough and is at risk of a one risk of major remediation costs. The
in 200 year flooding event or greater, resulting downtime on the strategic
which would not only overwhelm the routes would significantly hamper any
interchange but also inundate Belfast major incident response.
city centre and significant areas of
east Belfast, damaging property, AECOM partnered with the
affecting livelihoods and requiring Department for Infrastructure and
substantial funding and co-ordinated Northern Ireland Rivers Agency to
recovery response from numerous protect the scheme design with
local government agencies. additional flood resilient solutions
to protect the underpasses. These
We are delivering a £125–165 million added measures will allow the
upgrade of the interchange to underpass to remain accessible
address bottlenecks and improve for emergency services following
traffic flow to this strategic route. a major flooding event to assist in
Belfast’s recovery.
185/ ASSESS
PRIORITISING NATIONAL SECONDARY ROADS
Like any effective business plan: goals,
National Secondary Roads (NSRs) We are working with Transport objectives and metrics are needed
account for almost half of ROI's Infrastructure Ireland (TII) to to measure effectiveness. During the
National Road Network, or around understand the varying roles played evaluation of resilience, it is important
five per cent of all of ROI's roads. by different NSRs, depending on to consider the potential risks which
While they may only account for what their users need. This work has could affect the infrastructure. It is
20 per cent of daily traffic on the identified those roads that need to vital that any business consistently
country’s national roads, some NSRs be open all the time due to a lack evaluates potential hazards and threats
cater for high volumes of traffic, of alternative routes, so that they then measures and evaluates its
while others are vital routes for can be targeted for investment resilience plan, policies and procedures
people in rural areas who would be to improve their resilience during to determine their effectiveness at
isolated without them; overall, NSRs adverse conditions. This will help mitigating these critical hazards and
are integral to the performance of TII make better use of its resources threats. And the only constant is change.
ROI’s entire road network. within a limited budget while We know the threats are dynamic and
improving long-term performance while we may not be able to predict
and resilience of NSRs. the nature or timing of the change, we
must assume it will change and be agile
and ready to adapt. This assessment
is vital to evaluating the effectiveness
of investments made in resilience and
changes that might be necessary.
6/ TAKE ACTION
Consider the resilience protection already
in place; there will almost certainly be
opportunities to optimise and leverage
what already exists. And remember that
you may be able to share the costs with
others who stand to benefit from future
resilience investments. Waiting is not an
option — start small or start big — but
start now.
M50, Dublin
19TAKING THE LONG VIEW
Industry spotlight
T
here’s no doubt that when we
take stock of 2018 construction
performance across the island
of Ireland it was a case of two
varying perspectives. While
NI’s industry is growing, Brexit
and the collapsed devolved government
cast somewhat of a cloud of uncertainty
over the region. ROI on the other hand
experienced continued positivity.
So, what is the long view for the
island of Ireland’s construction
industry? The consensus for 2019 is
positive, as confirmed in our survey,
with 77 per cent of our respondents
envisaging an increase in business in
2019, half of who expect a growth rate
of five to 25 per cent.
That said, there are a range of
factors that could potentially impact on
performance in 2019 and beyond, not
least of which is Brexit.
Our survey results reveal that funding
shortages, complex procurement
approaches and inflexible permission
77%
processes are the top three reasons
why projects fail to ‘get off the ground’,
with resource shortages seen as the key
challenge in growing business over the
next five years. 50%
23%
13%
9%
2% 3%
(Increase 77%, Decrease 8%, Stay the same 15%)
Funding
Environmental
issues
Brexit
Competition
Resources
Market size
CHALLENGES AFFECTING GROWTH IN ANTICIPATED GROWTH IN 2019*
NEXT 5 YEARS* *Results based on AECOM survey
20Let’s take a closer look at the changes we’ve seen and those that we anticipate across the industry in each region.
Northern Ireland
Survival and growth
This is our third year of debating
must stop. The policies now being
implemented will help ensure the public £1bn of course an opportunity longer term for
Belfast to reconsider what the future of
Brexit and a (non-functioning) sector gets better value for money from will be injected retailing looks like in the city centre as
devolved government, yet the economy consultants and contractors alike and into the local well as the shape of and activity in those
hasn’t imploded and there’s no when more projects come to market we economy over the respective streets. Being a member of
next 10 years
significant unemployment. In fact, should expect significant interest. the 100 Resilient Cities will no doubt
the exact opposite has happened: help Belfast deal with these challenges.
unemployment fell from 4.7 per cent Private sector: a robust
to 4.3 per cent in 2018 and, as we performance
discussed in 2017, the economy has The private sector has continued to
not only survived but grown, albeit perform in a robust manner with fewer
modestly, with the construction difficulties in obtaining funding and
industry experiencing three quarters demand holding for both commercial
of growth over the past twelve months and residential buildings, with house
(Q3 + Q4 2017 and Q2 2018). This is prices continuing to rise with Q2
further demonstrated in wage inflation, 2018 prices 4.4 per cent higher than
which stood at 4.2 per cent in 2018 — the same period in the previous year
joint highest in the UK regions. according to the Northern Ireland
House Price Index. An additional four
Public sector: uncertainty yet per cent growth is expected by 2022, Primark Bank Buildings, Belfast
better value ahead making the region one of the best
Generally, feedback is one of frustration performing in the UK. If house prices The Chancellor’s 2018 Autumn
at the slow rate at which public sector are seen as a barometer of domestic Statement confirmed that the
projects are coming to market. This economy performance, we should be Belfast Region City Deal (BRCD)
is almost certainly down to the lack encouraged by a steady recovery rather was successful. City Deals are
of an Executive and the uncertainty than one of erratic growth. bespoke packages of funding with
surrounding civil servants’ ability to make the BRCD comprising six councils
decisions. However, when some clarity Challenges and opportunities in the surrounding regions. This will
is brought to this, we can perhaps expect Belfast suffered the significant loss of inject somewhere in the region of £1
to see a flurry of public sector projects the Primark Bank Buildings in August billion into the local economy over
being tendered. This will obviously 2018, which has without question the next 10 years with significant
be welcomed by the industry and is suppressed footfall in the retail heart amounts of investment in innovation
necessary to ensure the sustainability of of the city. NI-wide retail footfall was and digital, tourism-led regeneration,
the industry longer term. down 4.6 per cent in the immediate infrastructure and employability and
In 2018 the Department of Finance’s aftermath, with a 30 per cent reduction skills. With the potential to create
Construction and Procurement Delivery in Belfast. However, out of this terrible up to 20,000 new jobs, this is a good
engaged with industry to recognise that event, opportunity must come. opportunity to get public and private
fees and tender prices for public sector The knock-on effect of sectors collaborating to deliver real
projects need to be at more sustainable retailers relocating should opportunities for Belfast and the
levels and that the race to the bottom stoke the market and it is wider region.
Housing output ↑ 7.1%* Planning applications for major ↑ 13.4% §
developments received in NI
Infrastructure output ↑ 5.4%* during 2017/18
(those with important economic, social and
environmental Implications)
House prices ↑ 4.4% †
No. of cranes in Belfast ↑ 32%ǁ
Retail footfall ↓ 4.6% ‡ (between 2017–2018)
(in September 2018)
*NISRA †
Land and Property Services ‡
Springboard §
Department for Infrastructure ǁ
Deloitte
21TAKING THE LONG VIEW
Republic of Ireland
A benchmark for the future Sectors: mixed results in 2018,
If we take ROI’s construction industry 6% ROI’s tender prices increased in
2018 as demand and output continued growth in 2019
average performance over the past predicted increase in to grow, along with pressures on Throughout 2018, residential was one
22 years as the benchmark for future tender prices in 2019 limited resources this entails, with the of the most talked about sectors in
performance over the next 22 years to variation in regional demand impacting ROI’s general news due to chronic
2040, it is in a good place based on the on tender prices, seen as an estimated shortages in key urban areas. Actual
potential future scenarios highlighted increase of 4.5 per cent in the regions, increases in housing completions have
in the construction output chart 7.5 per cent in Dublin and an overall been slow relative to demand, in part
opposite. Taking the average annual average of 6.5 per cent in 2018. In 2019 due to the time lag involved; however,
growth in the value of construction we expect tender price inflation will there are some positive signs with the
output from 1996–2018 of 4.33 per moderate slightly to an average of six number of units obtaining planning
cent, and applying this on a year-on- per cent nationally with four per cent permission in the first quarter up
year basis, industry output in 2040 in the regions and seven per cent in 80 per cent on the same period in
would be circa €51 billion. In the chart Dublin. However, as is always the case, 2017. One major concern tempering
we run three other scenarios of a there will be sectors and locations that this positive sign is that of viability,
high initial growth, low initial growth will fall outside such averages. particularly in relation to apartment
and cyclical growth but arriving at A further factor to be considered developments. In many cases the costs
the same end point to illustrate how with construction costs in the broader may exceed the sale price available;
differently that journey might be. Of sense, rather than unit rates specifically, planning permissions granted may lay
course, the standard “past performance is that of regulatory and industry dormant until the viability gap
is no guarantee of future results” standards and related matters. is bridged.
caveat must apply and as a small open A clear example of this, which has ROI’s commercial and FDI sectors
economy, construction industry future been on the agenda, is the Nearly Zero continue to perform strongly. Public
performance is very much linked to the Emission Building. Coming into effect sector capital spend in areas such
economy as a whole. on newly completed public buildings as health and education has also
after 31 December 2018 and on newly grown year on year. Activity in civil
Costs, pressures and completed private buildings with a infrastructure has been sluggish;
tender prices completion date post 31 December 2020, however, there is optimism that the
The introduction of the Sectoral it is having an impact on overall costs sector will see an upturn in 2019.
Employment Order (SEO) increase and needs to be considered on a project-
of 10 per cent for general craftsmen by-project basis.
and labourers in October 2017 and for
mechanical services in March 2018
undoubtedly impacted on construction
costs and tender prices in 2018. In
contrast, material cost price increases
have been more modest, with the
weakened value of sterling a factor.
We estimate construction costs
increased on average by 3.5 per cent in
2018 and predict an increase of 2.5 per
cent for 2019. Sean O'Casey Bridge, Dublin
3.5%* No. of cranes in Dublin ↑
37% ‡
Construction costs ↑ in 2018 and predict an increase of from Sept 2017-Sept 2018
2.5 % for 2019
6.5% §
30.3% † Tender prices§ ↑ in 2018, estimated increase of 6%
Residential unit completions ↑ (first six months 2018 compared to in 2019
same period in 2017)
Construction employment ↑ 13.8% †
Value of construction output † ↑ 17.6% † Q2 2018 on Q2 2017
*AECOM †
CSO ‡
Irish Times §
AECOM, Ireland Tender Price Index
22Republic of Ireland's construction output 1996–2040
Value of construction output
60,000
Future output*: constant trend
55,000 Future Output*: initial low-growth trend
Future Output*: initial high-growth trend
50,000
Future Output*: cyclical trend
45,000
40,000
35,000
30,000
€m
25,000
20,000
15,000
10,000
5,000
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2030
2031
2033
2034
2035
2036
2037
2038
2039
2040
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2032
Year
*The future output trend lines are all based on reaching a hypothetical value of construction output of €50.8 billion in 2040, based on +4.33% per annum increase equivalent to the
average increase over the past 22 years. The four trend lines are to illustrate a number of potential pathways to the same end result.
Source: DKM Construction Industry Review and Outlook (various years), CSO Indices and AECOM estimates
Build resilience now
Managing tomorrow's issues Ultimately, the complexity of the more needs to be done, particularly
Life and economic development is industry continues to expand, as does around the key challenges identified in
never simple, with problems of the the frequency of issues requiring our survey.
future being very different than those dialogue and action. Collaboration between industry
we face today. While there is an air of Building resilience now is vital to us representatives and policy makers
optimism about the prospects for the developing a stronger long-term view is key to identifying the measures
years ahead, given the cyclical nature and in helping manage tomorrow’s needed to respond to these and wider
of the industry, we also have to prepare issues. Progress is being made on a business and societal challenges, and in
for setbacks. range of industry issues such as smart helping to maintain a more sustainable
technology and modular, but a lot industry long term.
TOP 3 SKILLS Engineering 23%
MOST IMPORTANT
TO DEVELOPING THE Project and
19%
INDUSTRY OVER THE cost management
NEXT 10–20 YEARS Strategy/
scenario planning 18%
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