Showing posts with label Building and Construction sector. Show all posts
Showing posts with label Building and Construction sector. Show all posts

Saturday, September 19, 2015

19/9/15: Irish Construction PMIs: August 2015


Irish Construction Sector PMIs for August showed moderate de-acceleration in sector growth.

Per Markit:


On a 3mo average basis:
  • Overall Construction Sector PMI stood at 60.4 in 3mo through August 2015, up on 57.8 for the 3mo average through May 2015, but down on same period a year ago (61.3).
  • Housing Activity sub-index posted deterioration m/m. However, on a 3mo basis the index through August 2015 (58.7) was up on the 3mo average through May 2015 (56.5), but down on 3mo average through August 2014 (63.5).
  • Commercial Activity sub-index posted deterioration m/m. On a 3mo basis the index through August 2015 (61.3) was up on the 3mo average through May 2015 (59.4), but down on 3mo average through August 2014 (62.4).
  • Civil Engineering activity sub-index posted deterioration m/m and a reading sub-50.0 for the second consecutive month. On a 3mo average basis, 3mo average through August 2015 was at 50.1, identical to the 3mo average through May 2015 and up on 47.6 average through August 2014.

Thus, all sub-indices have deteriorated on a m/m basis, and all, with exception of Civil Engineering, posted deterioration y/y on 3mo average basis.


As shown in the chart below, two key sub-indices of construction sector activity remain above 50 mark, but a sharp deterioration in overall growth momentum for the second month in a row. Both sub-series are signalling potential reversal in the positive momentum trend from September-November 2014 on.

In Civil Engineering, a brief recovery momentum signalled in Q4 2014 has now been erased:



Wednesday, March 11, 2015

11/3/15: Building & Construction Activity in Ireland: 2014




Irish Building and Construction industry production indices are out for Q4 2014 and full year 2014, so here is a quick look.

Quarterly data:


  • All building and construction activity rose 6% y/y in Q4 2014 by value and 4.5% y/y by volume.Compared to series low, value is up 55% and volume is up 51%. However, compared to historical peak, value is down 70.2% still and volume is down 71.8%. Thus, the annual rise is not impressive: single digit growth off the base that is so low, we are still 36.3% below Q4 2000 in value and 52.8% below Q4 2000 in volume. Worse, Q4 2014 marks the slowest annual growth in value and volume since Q1 2013.



  • Building ex-civil engineering index is up 9.8% y/y in Q4 2014 in value terms and is up 8.6% in volume terms. The series still trend 76% below historical peak in value terms and down 78 in volume terms. Compared to Q4 2000, the series are down 51.3% in value terms and 64% below in volume terms.
  • Residential building production is up massive 36.9% y/y in value terms and 35.2% in volume terms. Again, however, the base of activity is low: the series are still down 76.0% on peak in value terms and down 88.9% in volume terms. Compared to Q4 2000, residential building activity is down 70.6% in value terms and down 79.3% in volume terms.
  • Non-residential building activity fell 3.9% y/y in Q4 2014 in value terms and is down 5.17% in volume terms. The series are 15.3% below Q4 2000 levels of activity in value terms and are down 30.4% in volume terms.
  • Civil engineering activity - the only area of activity where we have been performing relatively better over recent years - posted a decline of 1.6% y/y in Q4 2014 in terms of value of activity and a drop of 2.88% y/y in terms of volume of activity. However, compared to Q4 2000, the series still run 64% ahead in terms of value and 20.6% up in terms of volume.


On annual basis, 2014 was a better year for value of activity compared to volume.

  • Across all building and construction sub-sectors, activity in 2014 was up 9.36% y/y in terms of value of production and up 8.29 in terms of volume. Both value and volume y/y growth rates were weaker in 2014 compared to 2013. Relative to annual averages for 2000-20002 period, activity across all sectors of construction is down 47% in value terms and down 58.7% in volume terms.
  • Residential building activity in 2014 rose 19.0% y/y in value terms (improving on 11.5% growth in 2013) and by 17.5% in volume terms (also improving on 10.8% growth in 2013). However, as with quarterly figures earlier, activity is growing of extremely low base. Compared to 2000-2002 annual averages, 2014 activity in this sub-sector is still down 78.3% in value terms and down 69.0% in volume terms.
  • Non-residential construction activity is up 8.3% y/y in value terms in 2014 (much worse than 19.4% rise recorded in 2013) and in volume terms activity is up 7.2% (also worse than 18.5% rise in 2013). Full year 2014 activity is still well below 2000-2002 annual averages (down 21.4% in value terms and down 31.7% in volume terms).




To conclude: 

  1. Some welcome improvements in the building and construction sector, driven primarily by residential construction activities, but coming off extremely low base of activity in 2013. 
  2. Key issue is how much of 2014 activity uplift was driven by planning permissions secured prior to major regulatory changes that are holding back current permissions activity. 
  3. Another key issue is the apparent significant slowdown in 2014 rates of growth in activity compared to 2013 rates of growth. 
  4. Third issue: despite still low levels of activity in the sector, builders appear to be chasing higher margins on price / value side, instead of lower cost projects.Thus value of activities is rising faster than volume for the second year in a row. If this scenario is sustained into 2015, we are unlikely to see construction sector gains translating into alleviating price appreciation pressures in the rental and house purchasing markets.


Sunday, December 14, 2014

14/12/2014: Irish Building & Construction Q3 2014: Another Quarter of Unconvincing Recovery


Indices for activity (volume and value) in Building & Construction sector in Ireland were published this week covering Q3 2014. Here are the details:

Across all Building & Construction sector:

  • Value index for all Building & Construction sector rose to 108.6 in Q3 2014 - the highest reading since Q4 2009 and the second reading over 100.0 since Q4 2010. Year-on-year, index is up solid 11.38%, slightly slower than Q2 rise of 11.55%. The index, however, is still 70.88% below the peak.
  • Excluding Civil Engineering, Building & Construction activity rose in value 103.4 in Q3 2014, he highest reading since Q4 2013 and up 9.77% y/y. This is the slowest rise in the index in 6 quarters. In Q2 2014, index rose 11.82% and in Q1 it was up 14.91%.
  • In volume terms, all Building & Construction activity index reached 108.1 in Q3 2014, up 9.97% y/y, slightly below 10.37% growth in Q2 2014. Volume of activity in the sector is still 72.40% below the pre-crisis peak.
  • Again, taking out Civil Engineering, the activity in the sector is growing at a slower pace in volume terms - up 8.43% y/y in Q3 2014 and down 80.03% on peak.
Chart to illustrate:


In basic terms, overall activity in the broad sector is running along a nearly flat trendline with some signs of very fragile recovery. And that is off the levels so abysmally low that one would require sustained 20%+ growth rates to achieve any meaningful gains.

Underlying the above trends, we have at least some life showing in the Residential Building segment. In Q3 2014, Residential Building activity index posted a 21.13% y/y rise in terms of value, reversing two consecutive quarters of decline. Still, value of activity in this sub-sector remains 90.5% lower than at the pre-crisis peak. In volume terms, the index rose 19.55% and is down 91% on pre-crisis peak. 

Two chart below show just how pathetic the recovery has been to-date in Residential Building & Construction sub-sector.



In summary, there is barely any life in the Building & Construction sector activity - measured against both volume and value of activity - across all sub-sectors, save Civil Engineering, where the falloff has been relatively shallower (down 26% on peak in Q3 2014 in terms of value and 28.5% in terms of volume). And, of course, the data is again contrary to the booming Construction Sector PMIs. What a surprise!

Interestingly, in non-Residential Building sector, activity is growing at the rates of just 2.33% y/y in terms of volume and 3.75% y/y in terms of value - despite the numerous 'good news' claims from Nama and the commercial real estate sector and despite the allegedly 'low' vacancy rates and rising rent rolls.

Monday, September 24, 2012

24/9/2012: Irish Building & Construction decline v EU27


Last post on Irish Building & Construction sector data for Q2 2012. Here are the comparatives for EU member states based on current activity (through Q1-Q2 2012) compared to 2006-2007 peak levels:


No need to comment on the above...

24/9/2012: Irish Building & Construction Sector Activity Q2 2012


And in another post prompted by @stephenkinsella tweet, here's an update on CSO data for Irish Building & Construction sector activity:

Ex-Civil Engineering:

  • Value index fell to 17.6 in Q2 2012 from 18.7 in Q1 2012, marking 5.88% decline q/q and down 15% y/y.
  • H1 2012 Value index is down 12.11% on H2 2011 and down 13.78% on H1 2011.
  • Value index fell to 15.5% relative to the peak and volume index declined to 14.66% of the peak level
  • Volume index dropped to 15.6 in Q2 2012 down on 16.7 in Q1 2012, marking a 6.59% decline q/q and 16.6% decline y/y. 
  • H1 2012 volume index was down 13.17% on H2 2011 and down 14.55% on H1 2011.
  • Both Value and Volume indices are now down on an annual basis for 22 consecutive quarters.


Civil Engineering:
  • Value of Civil Engineering activity rose from 58.4 in Q1 2012 to 62.7 in Q2 2012 (+7.36% q/q) and advanced 11/4% y/y, registering the first annual rate of increase after 15 quarters of contraction.
  • H1 2012 value index rose +1.68% on H2 2011 and is up 5.21% on H1 2011.
  • Volume of activity also grew from 52.3 in Q1 2012 to 55.8 in Q2 2012 (+6.69% q/q and +9.8% y/y) also breaking for the first time annualized contraction period of 18 quarters.
  • H1 2012 volume index rose 0.93% on H2 2011 and is up 4.75% on H1 2011.


Residential and non-residential:

  • Residential construction value index fell from 9.1 in Q1 2012 to 8.6 in Q2 2012 (-15.7% y/y and -5.49% q/q). H1 2012 index was down 9.69% on H2 2011 and down 16.51% on H1 2011. Relative to peak, the index is now down 92.45%.
  • Residential construction volume index fell to 7.7 in Q2 2012 from 8.3 in Q1 2012 (decline of 7.23% q/q and down 17.2% y/y). The index is now down 92.53% on peak.
  • Non-residential construction value index fell from 55.4 in Q1 2012 to 51.5 in Q2 2012 (-14.7% y/y and -7.04% q/q). H1 2012 index was down 14.41% on H2 2011 and down 12.23% on H1 2011. Relative to peak, the index is now down 58.23%.
  • Non-residential construction volume index fell from 49.4 in Q1 2012 to 46.0 in Q2 2012 (-15.8% y/y and -6.88% q/q). H1 2012 index was down 15.12% on H2 2011 and down 12.48% on H1 2011. Relative to peak, the index is now down 58.89%.




To sum up: rates of decline are (annually) in double digits and/or accelerating in Q2 2012 in Residential (value and volume), Non-residential (value and volume) and ex-Civil Engineering (value and volume). Residential construction is now at 8.6% of 2005 levels in value terms and 7.7% of 2005 levels in volume terms. Non-residential construction is now at 51.5% of 2005 levels in value terms and 46% in volume terms. Civil Engineering activity is now at 62.7% of 2005 levels in value terms and at 55.8% in volume terms. All activity ex-civil engineering is now down to 17.6% of 2005 levels in value terms and 15.6% in volume terms.

Thursday, March 15, 2012

15/3/2012: Irish Building & Construction Sector Q4 2011

About six months ago I was told by a 'person in the know' that there is huge construction boom about to happen in Ireland as multinationals are allegedly fighting over each other over suitable new office facilities. May be. Or may be not. I am not in the business of building stuff, so would have to wait for a credible flow of news and data to confirm such a shift in the trends. Today's CSO stats on activity in Construction and Building sector is not exactly pointing to a massive uptick.

Let's take a look.

First, data for construction & building ex-civil engineering:

  • Value index remained flat at 20.9 in Q4 2011, same as in Q3 2011. Year on year index is down 8.3%. 6mo average is now 0.2% ahead of previous 6mos average and year on year, 6mo average is down 12%. No improvement here. 
  • Value of construction and building ex-civil engineering is now down to 18.4% of the peak level.
  • Volume index also remained falt at 18.8 in Q4 2011 and Q3 2011, while year on year Q4 2011 index is down 5.5 on Q4 2010. 6mo average for the most recent 6 months is up 0.5% and year on yer last six months activity is down 9.2%. No improvements here either.
  • Volume of construction and building ex-civil engineering is now 18.0% of the peak.
Chart to illustrate:


As annual rates of change suggest - things are getting worse at a slower speed.

In terms of civil engineering output:
  • There was a substantial jump in civil engineering output value in Q4 2011 - up 27.7% qoq although still down 11.8% yoy. Latest 6mos average is 10.8% ahead of previous 6mo average and down 16% year on year.
  • There was also a measurable increase in volume of civil engineering activity up 27.8% qoq inQ4 2011, although still 9.1% down yoy. 6mo average through December 2011 is 11.1% ahead of preceding 6mos period and 13.3% below the same period in 2010.
So some improvements here in quarterly series and dramatic ones, but still down yoy:


Lastly, residential v non-residential construction activity:
  • Value of residential construction activity declined to  9.7 in Q4 2011 from 9.9 in Q3 2011. Value of residential construction sector activity is now 91.0% below its peak and is 90% below 2005 levels. Yar on year value of activity is down 21.1%. 
  • Volume of residential sector activity slipped marginally to 8.9 inQ4 2011 from 9.0 in Q3 2011. Year on year the index is down 15.2% and relative to peak it is down 91.5%. Volume of construction activity in the residential sector is now down 91% on 2005 levels.
  • Abysmal does not even begin to describe these results and there is no improvement in year on year performance since Q4 2006 in value and since Q1 2006 in volume terms.
  • Non-residential activity in value terms improved slightly from 62.7 in Q3 2011 to 63.6 inQ4 2011 - marking second consecutive quarter of improvements. Yoy activity in Q4 2011 was up 1.1% - first yearly rise since Q4 2008. Relative to peak value of non-residential construction activity is still down 48.3%.
  • Non-residential construction volume index also improved, marking third quarter of gains in a row, rising from 56.6 in Q3 2011 to 57.8 in Q4 2011. Annual rate of increase is now 4% and this is the first such gain since Q3 2007.


So on the net, some positive moves in non-residential construction which still require continued confirmation to the upside in the next 1-2 quarters in order to call the market bottom and a year or so more of consistent rises to call the upswing trend. Negative newsflow for residential, although some moderation in the rate of decline.