Construction Industry 2015

johnnyskeleton

Here is a forfas report on the Construction industry for 2015 published in 2013:

http://www.forfas.ie/media/19072013-Irelands_Construction_Sector-Publication.pdf

Their outlook for the construction industry for 2015 was to be largely unchanged from 2012.

So far, any positive news in the property area has been around sales. However, I wonder are we going to see an increase in construction over the next few years?

There have been a number of recent announcements of developements:

http://www.independent.ie/business/irish/lidl-unveils-its-major-new-development-plans-26590699.html

http://www.irishtimes.com/business/commercial-property/kennedy-wilson-nama-seek-planning-for-capital-dock-1.2162545

http://www.rte.ie/news/budget/2014/1014/652276-social-housing/

I don't think anyone is under any illusions that a property dependent economy like we had in 2002-2006 where construction and property sales constituted a significant part of GDP, employment and tax receipts, is unstable and could lead to a second recession.

However, it seems to me that Ireland still needs a lot of housing etc and a bit of an increase could do the economy a world of good.

antoobrien

johnnyskeleton wrote: »

So far, any positive news in the property area has been around sales. However, I wonder are we going to see an increase in construction over the next few years?

We are already seeing it, there was an increase in completions from 2013 to 2014 of about 3,000 (total ~11,000).

Godge

Small-scale developments on infill sites within the Dublin M50 area were definitely happening in 2014.

Some bigger developments such as the Phoenix Park Racecourse site also look set for commencement but not much work recently.

It may well be that the new Central Bank rules have slowed down the emerging recovery in domestic housebuilding.

A number of inner city commercial sites are also under development so there is much more happening than in 2012.

creedp

Maybe difficult for official industry to proper when the black market is prevalent -

http://www.irishtimes.com/news/social-affairs/social-welfare-fraud-squad-lies-in-wait-for-white-van-man-1.2173193

And this does not include the official industry doing cash work which in my experience is even more prevalent.

glacial_pace71

The CSO data on the construction industry does show continuing growth, both in employment numbers and in wage rates. (Can't publish links here yet, but if one looks at CSO subsection on ILP NACE REv2 economic sectoral classification - yet quite a mouthful - you'll find that Construction is sub-category 'F').
Employment growth from 96,000 to 116,000 is substantial by any measure. However, the State's capital budget, which is a considerable proportion of construction firms' current expenditure on wages and salaries, is still quite modest. And private capital investment is still quite sluggish, notwithstanding the huge demand for commercial office space. (However, having said that, much of the pressure is being created by multinationals of a certain size, i.e. they don't want a nice high-ceilinged Georgian building with limited electrical wiring capacity. They need the equivalent of a barn that they can customise themselves in terms of office space to server rooms etc).
However, the CSO's BCPI data - see separate section of their website - also shows the Q4 2014 data carries a few health warnings. As mentioned above I'm therefore not really surprised re 'civil engineering' showing a decline.
On the wage rises? See the CSO pages on 'earnings and labour costs'. The rises are modest enough, e.g. from a low of €662.89 in Q4 2011 to €746.10 in Q4 of 2014. (Still doing better than 'education' for example, down from €881.07 to €800.80 in the same 2011-2014 period). Construction still hasn't recovered to the Q4 2010 figure of €765.80, but that amount could well have reflected existing contractual arrangements in which the building-out/closing out of any given project would have entailed legacy costs at that time. Probably no more than 2 1/2 cheers for construction at present.

Massimo Cassagrande

There's so much half-built stuff around that new-builds are a dirty word. The steel fabricators - the ones who build the skeletons everyone else fills in around, aren't optimistic or bullish. They think there's enough already up and unfinished to cover the next five years..and the banks concur. Getting a loan for a new development is like getting a bucket of rocking-horse sh1t. Unless you have tenants already signed up and waiting.

Gumbo

Massimo Cassagrande wrote: »

There's so much half-built stuff around that new-builds are a dirty word. The steel fabricators - the ones who build the skeletons everyone else fills in around, aren't optimistic or bullish. They think there's enough already up and unfinished to cover the next five years..and the banks concur. Getting a loan for a new development is like getting a bucket of rocking-horse sh1t. Unless you have tenants already signed up and waiting.

Not necessarily. With the new building regulations and prices of houses at a lowish figure relatively speaking, it's a great time to by new.

The spec in new homes compared to 2006 is mega!

Massimo Cassagrande

kceire wrote: »

Not necessarily. With the new building regulations and prices of houses at a lowish figure relatively speaking, it's a great time to by new.

The spec in new homes compared to 2006 is mega!

You appear to misunderstand me - you are viewing it from a Home-Buyers perspective - it may very well be a good time to buy, I agree and house specs are indeed considerably improved in general -that is the Homes market.

From a Commercial Construction Industry perspective, getting finance to actually start working on a new commercial development, while not impossible, is a very hard sell to the banks unless there is an anchor tenant already in place - the overhang post 2009 of incomplete projects and the level of unoccupied commercial space makes breaking ground on new unsold ventures tricky. Not impossible, but tricky. The Industry needs these sort of large projects to be underway in order to really ramp up employment.

Dr_Bill

Whatever is happening in the house sector its not the be all and end all of the construction industry and it is sometimes hard to see that.

The civil engineering sector has been suffering for seven years, up until recently there has been little significant investment. The Irish civil engineering diaspora that built the motorways, bridges, tunnels & roads are still working around the world and most will probably never return back to Ireland maybe with the exception for those working in the UK.

Any trip to Dublin Airport on a Monday morning will see a large chunk of the Irish Construction industry hopping on planes to work and return on a Friday evening. That is the real price of austerity and mismanagement of the country, wives and kids who don't get to see their husband/dad, wife/mum from a large chunk of the week, not because they don't want to but because they have no choice in order to put food on the table and pay the bills, that is the true crime the human cost that can't be measured in GDP and is ignored.

Ireland still needs to invest in road infrastructure and to maintain it in order to protect the asset. Irish Water good or bad has to invest in the infrastructure which has been neglected for years. Sustainable levels of activity should be maintained across the civil engineering sector so that there are employment opportunities for the future and so that Ireland is not constantly exporting its talent.