– Residential schemes accounted for over 60% of all plans granted in 2021

PAT MACGRATH, Head of Research & Product Development of Construction Information Services (CIS), reports on planning activity for 2021 and early 2022.

Following the height of the pandemic, construction was slow to recover, with the pandemic posing a significant concern to industries throughout the lockdowns and the halting of works.

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According to the data, both volume and value building construction output in 2020 were down year over year – by 5.2% and 4%, respectively – marking the first annual fall in final output since 2012. With this, the construction industry entered 2021 under immediate pressure and uncertainty faced with strict lockdown procedures brought in to combat Covid-19.

Covid-19 recovery

The first quarter of 2021 reflected the magnitude of setbacks in the construction industry as output fell 27.3% from a year earlier, following a downwardly corrected 6.0% drop in the previous three-month period.

The residential sector was the hardest hit, with activity dropping 60.9%, followed by considerable drops of 19.5% in non-residential and 33.6% in civil engineering activity. Construction output fell by 21.0% on a quarterly basis, dropping from a 5.2% increase in the fourth quarter (CSO).

In the third quarter of 2021, Ireland’s construction output fell 1.4% year on year, following an upwardly revised 28.4% increase in the preceding three months. Construction activity has also remained modest compared to pre-pandemic levels. Non-residential construction fell 6.5% compared to 23.7% in Q2, while residential construction rose 7.7% and civil engineering works rose 20.6%. Construction output increased by 7.5% on a quarterly basis, following a 9.9% increase the previous quarter.

Construction Information Services Top 20 Projects By Value (Shell & Core) 2021

Planning activity

Overall, the value of planning activity in 2021 (plans submitted and plans granted) grew by 12% from 2020 to €38.5bn. This was a significant rise given that there had been a 3.7% fall in such activity in 2020. The biggest driver in these figures was the residential sector, which represented 63% of all planning activity and grew by 13.7% in 2021.

Other significant movements in pipeline activity were a 22% fall in hospitality and a 21% fall in commercial activity.

The industrial sector, which includes warehousing and data centres, rose by 24%, reflecting lifestyle changes exacerbated by the pandemic.

Construction Information Services Most Viewed Projects 2021

Looking forward

Data from Q1 2022 demonstrates the construction industry’s sustained resilience in the face of several distinct problems, including rising material costs, supply disruption, Brexit, the pandemic and rising fuel costs, and, latterly, the effects of the war in Ukraine.

Across the island, new project starts totalled slightly over €3bn for the quarter, the third-largest quarterly value in the past three years, after only Q2 2021 (€4,4bn) and Q3 2021 (€3.2bn), and up from a three-year quarterly average of €2.3bn.

Of course, there were differences across sectors. For the third straight quarter, new residential construction declined to €979m (excluding new phases of existing developments). Non-residential starts increased by 27% in Q1 to €1.2bn, exceeding the three-year quarterly average. Indeed, the only industries where new beginnings fell below the previous three-year average were medical, retail, and hospitality.