Construction Recovery- watch this space.

by Bregs Blog admin team


Construction Recovery- watch this space. 

It has been widely reported that Commencement Notices spiked in January and February of this year as building owners tried to avoid the new building control regulations. The number of commencement notices submitted during the first two months of 2014 was equivalent to 70% of the entire number of construction starts for 2013 were notified in just the first two months of 2014. (see post here)

One would expect that if Commencements were up, that this would be reflected in construction spending. (After all before you start on site you need to tender the job and contract a builder). It is widely believed, however, that a significant number of the early Commencement Notices are not live construction projects.

The Ulster Bank PMI [Purchasing Managers Index] shows very confident growth in construction spending in the nine months to May 2014.

Link to Ulster Bank PMI here.

The June figures are out and the figures for residential and commercial construction remain strong at 59.9 and 61.3 respectively- see pdf to follow. Although only slightly lower than in May there is nothing yet to suggest the spike in commencement notices has worked its way through the industry. Civil Engineering activity is down however to 45.1 from 47,9- possibly a reflection of continued depressed infrastructure spending.

All eyes will be on the July and August figures to see if this trend continues or if the sharp fall off in commencements since 1st March starts to bite.

In a recent Irish Building Magazine article “Construction output up strongly in Q1” (view article here), the current rise in construction sector activity in the non-residential sector was noted from Central Statistics office figures.

Quote: “…the latest release indicated sharp falls in residential (-4.2% qoq, -4% yoy) and civil engineering work (-3.7% qoq, -2.6% yoy) in Q1. The sharp fall in residential work is a little surprising given the strength of the PMI surveys in Q1. The PMIs had been indicating strong gains in both commercial and residential work throughout the quarter. Moreover, early year housebuilding statistics showed completions up 1.6% in the year to February.

However, the CSO has cautioned on the interpretation of the construction data given a recent re-weighting and the unprecedented low base from which the series is starting. We therefore cannot read too much into the sectoral split of the headline data.

PDF of Ulster Bank Construction PMI Report (June 2014):

UlsterBank_RIEconomics_UB Construction PMI_20140714

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

The extraordinary cost of BC(A)R SI.9 of 2014 – click link here