Press: Fears construction recovery will stall
by Bregs Blog admin team
In the following article from June 7th 2014 “ Fears construction recovery will stall” by Stephen Rogers in the Irish Examiner, the recent survey of consumer sentiment undertaken by the Construction Industry Federation (CIF) is discussed (see survey post here).
Many commentators fear that the recent implementation of the new building regulations is acting as an impediment to new constructions starts. This trend appears to be backed by recent construction starts as reflected in falling levels commencement notices lodged with Local Authorities. Previously we noted a “spike” in these levels in advance of implementation on 1st March 2014.
From implementation to May 26th 2014 the total number of valid commencement notices on the LGMA website is shown at 509- this is for a 3 month period. The average number per month for 2013 was 621. This worrying trend was reported in the Irish Times (see post here) and commented upon in correspondence by Minister Hogan to the same paper (see post here). Worryingly this falling trend seems to be establishing itself and when read alongside some of the concerns in the CIF survey, suggests nationwide construction recovery and job creation is far from guaranteed.
Link to Irish Examiner Article ““ Fears construction recovery will stall” here
Extract from article:
Fears construction recovery will stall, By Stephen Rogers, Irish Examiner Reporter, Saturday, June 07, 2014
Recovery of the construction industry will stall if contractors cannot secure more tenders in certain parts of the country where activity is stagnant.
The Construction Industry Federation (CIF) further warned that access to credit for members remains a “serious and common problem” while building costs are also a worry.
The comments came after the federation carried out a ‘confidence survey’ among its members.
Some 31.7% of respondents said access to credit was the biggest impediment to growing their business, while 35.9% pointed to lack of available tenders.
“Whilst there is a recovery, it is not uniform and there are few tenders coming on stream in certain parts of the country and in certain sectors,” a CIF spokeswoman said.
“If the number of tenders does not increase, the recovery may stall.
“Members report that as with other industries, access to credit is both a serious and common problem. Currently banks are looking for between 40% and 60% capital from companies wishing to finance a project.”
CIF said its survey found the cost of building was also a significant concern.
“In some parts of the country, the construction costs are higher than the likely selling price for any end product.”
CIF also said there were 30,000 live planning permissions in the Greater Dublin Area, but 21,000 relate to apartments.
“Other than in the city centre, there is little appetite for this kind of development,” it said.
Despite some concerns, the survey found that, overall, more than half of construction companies expect their business to grow this year.
Other posts of interest:
CIF Construction Confidence Survey – click link here
Minister Hogan rejects Irish Times Article – click link here
Irish Times: Dramatic fall in number of buildings being started – click link here
BC(A)R SI.9- BCMS: “must do better” – click link here
Building Control Officers: Survey – click link here
Breg Snapshot Survey: BC(A)R SI.9 – click link here
Iaosb letter to Minister Hogan following his replies in the Seanad – click linkhere