‘Recovery’ is Still Worse than the 1980s Crisis

by Bregs Blog admin team

5690690936_d1e2281081_z The following piece was posted on 24/6/2014 by Dr. Constantin Gurdgiev, lecturer in Finance in Trinity College, Dublin and in the Smurfit School of Business, UCD. He has served as the Head of Research and Partner with St Columbanus AG, Head of Macroeconomics (Institute for Business Value, IBM), Director of Research (NCB Stockbrokers), Adviser to the Irish Exporters Association; Group Editor and Director (Business and Finance Publications). He also served as non-executive member on the Investment Committee of Goldcore. Link to his Blog “True Economics” is here. Interesting analysis of Dublin property prices also this week.

Extract from blog “True Economics:

Planning Permissions in Ireland: the ‘Recovery’ is Still Worse than the 1980s Crisis

There are many drivers for planning permissions applications in Ireland, including traditional ones (economic fundamentals, demand, credit supply availability etc) and idiosyncratic (changes in planning regime etc). Not to comment on either of these, here are the latest stats (through Q1 2014) on the subject. Q1 2014 registered an uplift in total number of planning permissions granted, which rose y/y by 17.0%. This sounds like a large number, except the problem is – it comes off such a low base that Q1 2013 actually was an absolute historical low for planning permissions for any quarter since Q1 1975. In real terms, as the chart below clearly shows, since Q1 2011 through Q1 2014, maximum number of planning permissions granted barely reaches previous historical low in Q1 1988. That’s right: the worst of the 1970s-1980s is the best of 2011-present range. In fact, Q1 2014 ‘improved’ activity in terms of planning permissions is 11.7% lower (that’s right – lower) than 1975-1999 lowest point. pp total 2 Dwellings permissions are currently sitting 38.9% below their absolute low of 1975-1999 period, although these did rise 3.36% year on year. pp dwellings 3 In terms of total square meters relating to permissions granted, things are no better. Year-on-year volume of permission granted by square meters is down 20% for all applications. From Q1 2011 through Q1 2014, total square meters of permissions granted have been trending basically in line with the lowest levels reached in the 1980s. 4pp granted I am not sure if anyone can tell with any degree of confidence as to what the effect of new regulatory regimes is on these numbers, but one thing is very clear – the recovery is not to be seen anywhere in the above numbers, yet. Despite some reports in the media and from the industry suggesting that things are getting better and better.

Other posts of interest:

CSO: (Q1 2014) planning permissions for dwellings -30% drop – click link here

Taoiseach: get building back to ‘sensible, sustainable levels’- click link here

Press: Construction and property bouncing back as jobs surge – click link here

Press: Fears construction recovery will stall – click link here

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

Commencement notices fall: BC(A)R SI.9  – click link here

BC(A)R SI.9- BCMS: “must do better” – click link here

Advertisements