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Updated 10.30
GROWTH IN THE Irish construction sector has hit a slowdown.
Total construction activity fell for the fourth successive month in a row, according to the Ulster Bank Construction Purchasing Managers Index.
Growth rates fell sharply during February. This was evident in terms of activity, new orders and employment. Sentiment, which is used to measure firms’ predictions for future work, eased to the lowest since October 2013.
February’s sharp drop is the weakest in the current 18-month sequence of growth.
Comparing rates with the same period the previous year, there has been a slowdown in the housing, commercial and civil engineering sectors.
Housing activity fell back this month to 50.1 from 54.4 in January 2015. Commercial activity fell from 61.6 in January to 54.6 last month, while civil engineering activity fell from 54.5 to 49.3.
Any figure above 50 represents growth, while a rating below that number indicates a decline.
“The key feature of the February results is another sharp drop in the index which indicates that the pace of growth eased significantly last month,” said Simon Barry, chief economist at Ulster Bank.
He said the survey paints a “disappointing picture”.
Stagnation in building
The stagnation of housing last month is a stark contrast from the record rates of expansion recorded as recently as September of last year.
It could be that some of this weakness is linked to higher levels of uncertainty surrounding the housing market outlook related to the recently-introduced Central Bank mortgage lending regulations. However, the weakness emerging in the past couple of months has extended beyond housing.”
However, he said that activity has also fallen back materially in both commercial and civil engineering sectors, which are not directly affected by the Central Bank measures.
He said this points to more broadly-based weakness.
While Irish construction remains in recovery mode, it is clear that the sector’s recovery dynamic has weakened considerably in the early part of this year.”
Land values to keep rising
In more bad news for those looking for affordable homes, property agency Savills has predicted land values will keep rising this year “and beyond”.
But the company’s research director, John McCartney, said the increase in prices should lead to more vacant sites being released on the market this year and an eventual rise in construction.
Savills said Dublin would remain a “focal point” for land sales, however regional cities like Cork, Limerick and Galway, and commuter counties around Dublin were also likely to see increased activity.
The government has flagged putting new taxes on vacant property to discourage landholders from sitting on big land banks in the hope of future price rises.
Additional reporting Peter Bodkin
First published 6.20am
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Oh no, don’t tell me the boom is over already. I’ve already put my deposit on a 2 bed apartment in Castleknock for €580,000…
I wonder if anyone has tried to upscale Lego and make a full sized house out of it?
Brickies would earn a fine pay cheque if payed per block layed.
James May made a TV programme a couple of years ago, doing just that. Even the interior fixtures, fittings and furnishings were made out of it.
I bet if they started changing land back to agricultural they’d start building
Building game is f##ked,builders refuse to pay agreed rates,or
Employ irish tradesmen on site in priory hall in Dublin. And we all know what happened there, cheap work is not good work.
We make property expensive by making bringing it to verge of extinction… Kaaaaachiing suckers.. Snort snort dine wine pick billion out of A-Hole con twist deceive repeat con twist decieve repeat snort snort pop pop bonuses party.
It’s feasible that it’s down to planning permission lag. Could the Journal x-ref this with planning permissions ready to go in Dublin and other areas?
Artificially choke supply with a high demand and prices will rocket.
Go, FG/Lab – banks, developers and estate agents are loving this (your BFF’s). Everyone else, not so much.
Great job government
Loosening of post Priory Hall regulations for one off domestic dwellings are reportedly in the pipeline soon. Surely the potential to save tens of thousands by delaying a few months would be enough of a carrot to account for a slump.
Why are we not building with hemp? Hemp had ability to store carbon, reversing climate change, and does not require buildings to be heated, lowering co2 again, and saving everyone a money except the energy companies… two guesses as to who is anti hemp
Who?
Hold on – how can this be true? For the last three weeks and more the Journal has been bigging up the great resurgence in property values. JobBridge Joan told her party conference that the economy is in recovery and that “the cranes have reappeared on our skylines”. Surely we are headed to the promised land, and milk and honey awaits us VERY SOON. Live horse and you will get grass. It is always a little sad when the hype and downright dishonesty is exposed – hard not to feel a bit let down – YET AGAIN.
Bob the trainee.
NAMA knocked good houses and housing estates down for what, could they have not put the homeless into them?
No one cares if they did they stand up to this government and say no more?
There are 440,000 getting a dole payment you know?
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