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30-04-2010

France offers Irish construction firms significant opportunities for future growth - Mazars

April 30th 2010: Irish construction firms should look to France for future opportunities, according to accountants and business advisors, Mazars.

The Mazars Irish and Construction 2010 Outlook survey highlighted that over 80% of construction firms in the Irish market rely on indigenous work. As investment in infrastructure continues to contract in Ireland, both in the public and private sectors, and the UK continues to stabilise, but with significantly reduced margins, industry players are being forced to look at wider markets.

France is one country which has most potential according to Roger Alexander, head of Mazars’ Project Finance, and of the Mazars Belfast Office.

Mr. Alexander said that, unlike Ireland and the UK, France has remained immune to a collapse of its commercial property market and has a strong pipeline of public sector projects which offer opportunities for Irish construction firms. "It is forecast that the French construction industry will still be valued at around €166 billion in 2010, as opposed to €177 billion at its peak in 2007," he said.

"Whether due to the degree of risk aversion, the market’s maturity or other factors, France has remained immune from a collapse of its commercial property market and has had a strong pipeline of public sector projects, including PPP (public private partnership) projects. Indeed, France has one of the most dominant pipelines of PPP and infrastructure projects in Europe, by way of transport, social accommodation and renewable energy," he said.

Noel Cunningham, Tax Partner, Mazars, said: "In working with the big three in France - Bouygues, Vinci and Eiffage - Mazars have been involved in most of the PPP’s in France to date and see significant opportunities for the Irish supply chain and for investors, through partnership with stakeholders in France. We continue to work with a range of Irish companies who work with Mazars clients across France, and we see continuing interest as other markets, such as the Middle East, become more saturated and competitive".

Mr. Alexander added that, despite having shrunk by 2.3% in 2009, the French economy appears to be rebounding, even if there are uncertainties about the pace of the revival. "So far, government stimulus programmes and companies reinvesting have been the main drivers of this growth".

Alain Porcher, French market construction consultant, Enterprise Ireland, said: "The main projects defined by the ‘Grenelle’ Talks (in the construction, transport, energy and waste management sectors) will require almost €460 billion of investment by 2020, of which €308 billion will be in construction. This will be split into €205 billion for housing/buildings and €103 billion for transportation".

"About 40% of the funds will be provided by the French government and local authorities and up to 600,000 new jobs should be created as a result. Greenhouse gas emissions will be 24% lower by 2020 as part of France’s commitment to ‘green growth’, which will create numerous investment opportunities for French and foreign companies," said Mr. Porcher.

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