Value of Construction projects up over €800m
The value of construction projects commenced saw a significant increase in the first half of 2015, rising by €802 million to €2.754 billion when compared to the same period in 2014 according to the Building Information Index. This represents an increase of +41% in the value of actual construction activity for the first six months of 2015 when compared to the first half of 2014.
The Building Information Index is measured by factors that correlate with the phases in a construction project. The first is Project Commencements which relate to projects that are in progress on-site and where construction activity has commenced. The second is Applications which are a real time barometer of sentiment in the construction sector and relate to all projects that have applied for planning permission in the first six months of 2015.The data contained in the Building Information Index is aggregated by Building Information Ireland from real time planning and project information.
Danny O’Shea Managing Director of Building Information Ireland said “The Building Information Index shows that the value of construction projects increased by €802 million to €2.754 billion in the first six months of 2015 from €1.952 billion for the same period in 2014. When these figures for the value of Project Commencements are broken down for the different regions, the Building Information Index shows that the recovery in the construction sector is being felt across the whole of Ireland, with Munster recording the largest increase with gains of +116%, while Dublin (+34%), Leinster (+27%) and Connaught/Ulster (+8%) also performed strongly.”
“When we analysis Project Commencements in the first half of 2015 in each the seven sectors that the Building Information Index compiles data for, Commercial and Retail was the strongest performing sector at €624 million which represented an increase of +141% when compared to the same period in 2014. The Industrial sector also recorded strong gains at +58%, while the Residential sector recorded growth of +44% year on year with the value of residential construction projects started in the first 6 months of 2015 valued at €1.43 billion. Education (-37%), Agriculture (-12%) and Medical (-6%) all recorded a fall in the value of the construction projects for the first half of 2015 when compared to the same period in 2014.” continued Danny O’Shea Managing Director of Building Information Ireland
Applications up +27%
There was further good news for Applications, which measures the value of construction projects that have applied for planning permission, as it rose by +27% to €7.011 billion in the first six months of 2015 from €5.5 billion for the same period in 2014.
Funding from Private sector driving growth
“The strong growth recorded in the first six months of 2015 in the value of Applications as well as the value of Project Commencements is further evidence that the construction industry in Ireland is continuing to recover. Critically, the Building Information Index reveals that the source of funding which is driving this recovery is coming from the private sector. Funding from the private sector for Applications was €6.428 billion in the first six months of 2015, which represented an increase of 30% when compared to the first half of 2014. By comparison, in the first six months of 2015, public sector funding for Applications only increased by +2%, rising to €584 million from €573 million in the first half of 2014.”
Average number of weeks from Application to Commencement
The Building Information Index shows that the average number of weeks it takes for a construction project to get from the planning application stage to work starting on site was 74 weeks for the first six months of 2015.
Construction projects in the Residential sector were the slowest to get through this process, taking on average 139 weeks. Agriculture and Education construction projects were the fastest at 51 weeks, followed by Industrial (57 weeks), Commercial & Retail (59 weeks) and Medical (63 weeks).
“The first half of 2015 has seen a marginal fall in the average number of weeks it takes for a construction project to get from planning application to work commencing on site when compared with the first quarter of 2015. This can be interpreted as a further sign of improving sentiment in the market, as applicants and contractors are not taking as long to start projects.”