Press: Jobs growth slowed to snail’s pace in 2014

by Bregs Blog admin team

2014-08-27_opi_3116457_I1

Press: Jobs growth slowed to snail’s pace in 2014

The government’s much publicised programme for jobs seems to be stalling, given indicators mentioned in this press article.

Concerns for recovery as jobs growth slowed to snail’s pace in first half of year – Independent.ie

One area with significant growth potential is the construction sector. We have mentioned the spin and promotion from vested interests in previous posts, but as economists frequently point out “the numbers don’t lie”.

A slowdown in the construction industry was widely anticipated by commentators and key stakeholders in advance of the new building regulations in March 2014. Indeed this was masked in the rush to lodge commencement notices in January and February, owners keen to avoid the considerable additional administration costs of SI.9.

In January of this year the president of the representative body for architects (RIAI) wrote to Ministers Bruton and Hogan warning them of the difficulties and dangers of introducing incomplete and premature building control legislation (see link below).

While market forces seem to be pulling the construction industry out of recession, other factors such as a lack of planning permissions and “ready to go sites” along with financing difficulties are mitigating this trend. In addition a major drag on the recovery would appear to be the new regulations themselves.

With a drop year on year to date since march 2014 of 50% in construction commencement notices, the “BCAR Effect” is quote pronounced and was immediately felt in the industry. It has been most visible in the self-build sector which accounts for over 1/3 of all once-off houses built nationwide. Widely anticipated to result in nearly one third of all self-builds being abandoned (source IAOSB) SI.9 appears to be doing just that- causing owners to postpone indefinitely and abandon projects. Uncertainty due to legal issues at completion stage, discrepancies in SI.9 documentation along with significantly increased costs for self builders due to professional fees and the recommendation to use a CIF registered contractor (estimated at over €40,000 for a typical €180,000 house)- all these factors are impacting on the one sector, residential, which would appear to be experiencing an upswing (see link below).

At intervals when they have been available we have posted up-to-date figures on commencement notices uploaded and verified on the Building Control Management System- see links below. This government source suggests the average level of commencements is currently running at 50% that of last year, a historic low point in construction output (see links below).

In a recent EGM the representative body for architects (RIAI) reiterated a consensus view that SI.9 is defective an not in the interest of the consumer. The RIAI is a key stakeholder and was involved in the formation of SI.9. We believe the RIAI is working furiously finishing off a proposal for the Department for an alternative building control system with independent local authority inspectors at its heart, similar to the current highly successful UK system (see link below).

The question is not if but when will our new Labour Minister Alan Kelly revoke SI.9.

We have seen how his Fine Gael colleague Minister Leo Varadkar was able to jettison a key element of government policy, universal healthcare, almost immediately on appointment. This U-Turn was done to broad acclaim (and relief) by the healthcare industry.

The new Minister is not bound to continue the mistakes of his predecessor- he would do well to look towards election in 18 months and realise what is appropriate for the construction industry now may also be politically expedient in the medium term.

Other posts of interest:

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