Construction industry leaders believe that a State Housing Bank must be a key solution to the housing crisis, according to the latest survey of the sector by PwC, while a possible 'Brexit' is causing uncertainty and the continued skills shortage is causing problems.

The PwC construction industry survey also shows that confidence remains high among respondents, although rate of revenue growth is expected to be somewhat lower than last year.

Creating a new State Housing Bank to finance housing and provide affordable mortgages is by far the most popular corrective measure to increase the provision of housing, with 44% of replies favouring it. Enacting emergency planning and development legislation and mandating the Central Bank to revise its mortgage lending rules are cited by nearly a quarter of respondents as solutions. Implementing uniform design specifications for all local authorities was suggested by nearly one in five (18%) as the first preference solution.

Nearly half (48%) said that a possible 'Brexit' would affect their businesses. Indicative of the possible complexities and unknowns, a further third (36%) said they did not know and nearly one in five (16%) said it would have no impact. For those who said it would affect their businesses, 71% said that if the UK were to exit the European Union it would increase uncertainty generally on investment decisions; 38% said that their revenues from UK projects would be affected due to the uncertainties and nearly one in ten (8%) indicated that their ability to relocate staff to Britain may become difficult

Others said it would affect their UK suppliers and relations with these suppliers, and may create more barriers when doing business with the UK. On the plus side, some said that they expect it may increase demand for office space in Dublin; others said they would expect more multinationals to come to Ireland, increasing the pressure on housing here even more.

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Ronan MacNioclais of PwC said: "The survey suggests that while Ireland's construction industry is in expansionary mode with positive plans for growth, revenue expectations are somewhat less than last year. While some challenges are easing up, factors holding it back are the skills gap, available finance and for those who are exporting, external uncertainties such as the possible impact of the upcoming vote on a British withdrawal from the European Union."

Securing finance for projects is the top challenge facing the industry, say 54%, down from 63% last year. This is followed by competitive project pricing (44%) and the scarcity of qualified staff (32%). The challenge of burdensome building regulations, the planning regime and high building material costs have all eased more than 10 percentage points compared to last year.

Over a third (37%) of respondents confirmed that they would seek non-bank finance in the year ahead, compared to 2015’s 45%.  Going the private equity route is the most popular (47%) source for non-bank finance, followed by joint venture arrangements (38%) and mezzanine finance (38%).