Construction stalls in first half of 2017, indicating a ‘two-speed’ economy
While Dublin and the east coast enjoy a plethora of new buildings projects, other parts of Ireland are struggling to keep up, according to new research released by the Construction Industry Federation.
After auditing construction projects in the public and private sectors, except one-off housing, Construction Information Services indicate new developments under construction are focussed on several limited areas; namely, 28pc in Munster, 27pc in Dublin, 24pc in Leinster, 13pc in Connaught and 8pc in Ulster (Republic of Ireland).
According to the report, the construction industry has stagnated with figures of 1,325 for the first six months of 2017, compared to 1,317 for the same period last year. Between 2015 and 2016, the Republic of Ireland enjoyed a significant upturn in new building projects which is not in evidence this year.
This same sluggishness is evident in the number of planning applications that have been granted this year in comparison to the same period last year. Currently, figures indicate that just 2,672 plans have been granted in 2017, a drop of 10.4pc or 312 compared to the equivalent interval in 2016.
While residential buildings have enjoyed an increase with 48 more projects granted permission in 2017 than during the first six months of 2016, amounting to 8,193 units, the agricultural sector shows a marked decrease with just 694 projects given the go-ahead.
CIF director general, Tom Parlon, said, "This data shows where construction activity is concentrated and how we are progressing towards the delivery of the €45bn outlined in the Government's Public Capital Programme and the 35,000 homes annual output our society requires.”
36% increase in Ireland House Building https://t.co/zURfOgnn9l— Construction Jobs (@Construct_job) August 14, 2017
Mr Parlon went on to explain that the inactivity in the development of new projects is particularly concerning given that the housing shortage is reaching a crisis point where it is beginning to threaten the economy. "We've long stated that there are fundamental issues such as a lack of finance, procurement issues and infrastructure gaps that are preventing the efficient and timely delivery of critical construction projects," he added
With the industry accounting for only around 7pc of the nation’s GDP, it is far below the 12pc agreed upon as a sustainable level. Mr Parlon said the analysis produced by Construction Information Services should alert the Government, local authorities and construction industry to the severity of the problem and encourage them to increase their communal efforts to deliver the country’s construction needs.
Several large projects are now nearing completion, meaning the fall in granted planning developments, plus their lacklustre values and volumes, put the civil engineering sector under extreme pressure.
With Ireland enjoying considerable growth, the public capital programme for infrastructure development and construction is failing to keep up. Mr Parlon said the annual budget of €350m per year up to 2019 “is paltry in the context of the scale of large infrastructure projects required to cope with Ireland's rapidly growing population and expanding economy."