2017 has seen a stagnant start to the year with new Construction projects in Ireland, planning applications and start-ups showing little increase on last year, despite Ireland’s structural shortfall and high demand for housing
The Director General of the Construction Industry Federation, Tom Parlon said the report indicates limited progression in the construction industry despite the demand for activity across the commercial, residential and infrastructural sectors. The number of projects that have been granted permission are not showing the increase required to meet the target of 35,000 homes being built annually by 2021. Mr Parlon said, “As we move into 2018, we should be seeing a larger increase in the numbers of plans submitted and granted and in the projects starting onsite. We will continue to monitor progress throughout 2018 and 2019 to identify potential blockages in the construction pipeline around the planning system.”
The CIF has attributed the housing shortage and lack of infrastructural development to a number of underlying problems, including the lack of finance, problems in the procurement process and planning delays. These are preventing essential projects from being delivered effectively and timeously and leading the country into an infrastructural crisis that could impede economic development. Mr Parlon continued, “The industry currently accounts for about 7% of GDP well below the agreed sustainable level of 12%. Today’s analysis by Construction Information Services should provide a clarion call for Government, local authorities, and industry to collaborate more effectively to deliver Ireland’s construction requirements.”
Projects for which plans have been granted do not offer the value or volume required to really boost the civil engineering sector, particularly as larger scale projects are now nearing completion. Lack of investment by the State has caused vital infrastructure developments to be deferred and, according to Mr Parlon, “DKM carried out an analysis of Government expenditure on actual infrastructure construction (roads, rail, broadband etc) and it revealed that there is only around €350m available annually up to 2019. This amount is paltry in the context of the scale of large infrastructure projects required to cope with Ireland’s rapidly growing population and expanding economy.”
The CIS report looks at all projects, from those with proposed plans, to those with permission granted and those that are already underway. Their analysis indicates all areas are either static, down or slightly up on the previous year and suggests there is neither the bulk nor the fiscal worth evident in these to sufficiently boost the civil engineering sector.
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The number of construction projects that have been launched in the first half of 2017 is equivalent to that of the same period last year, with just 8 more projects this year compared to last. Residential developments have fared a little better with 276 ventures starting up in 2017, compared to 200 last year. Of these units, 7,597 are in multi-unit developments which suggests the Government’s efforts to accelerate residential developments, such as through the help to buy scheme, are gaining momentum. Other figures also show an increase in the residential sector with 48 more projects gaining permission, totalling 8,193 units.
Regional statistics offer a mismatched picture, with Leinster down by €250m on 2016, but with 35 more projects starting up. Munster offers an inversion of these indicators, with values up by €60m but numbers down by 16. Ulster’s figures have dipped both in terms of monetary value and capacity, by €75m and 4 projects respectively, while Connaught has seen an overall increase with values up by €150m and projects increased by 32. An increase of €151m in values has given Dublin a boost but the volume of development is not commensurate with this rise.
Overall, the construction industry has remained almost motionless with a year-on-year increase from 1317 from 2016 to 1325 in the first half of 2017. The residential sector shows a little growth which seems to result from Government initiatives finally gaining impetus. Overall, residential projects have increased in permissions by 48 projects, including self-builds, reaching a total of 8,193 units.
Plans granted also shows a continuing downward trend with a drop of 10.4%, meaning 312 less developments compared to the same period in 2016.
Plans submitted do offer a little hope with a slight increase overall with growth in Hotel & Catering (29%), Education (23%), Community & Sport (79%) and Residential (24%) offsetting the drop-offs evident in Agriculture (-34%) and Medical & Care Residential (-11%).