National Housing Construction Index registers decrease but contains signs of improvement

The most recent edition of the National Housing Construction Index, compiled and issued by Link2Plans, illustrates the continued decline in housing construction activity across the country. While there is a fall in both planning applications and commencements, the drop in applications has decreased significantly whereas the decline in the number of commencements has risen.

The National Housing Construction Index measures every submitted planning application and planning commencement across Ireland from January to June 2013. This Index gives a direct comparison with the same period in 2012. 

Classifying and analysing all planning applications and commencement notices, as provided by local authorities, Link2Plans measures on two axioms – firstly, the planning applications which measure potential future activity and secondly, commencement notices which provide ‘a real barometer’ of actual activity. Viewed on a nationwide basis, the National Housing Construction Index reveals there is a decrease in planning applications (-10%) but project commencements were down even further (-14%).

Nationwide applications fall by 10% yet four counties show increase

Offaly, Leitrim and Sligo exhibit the largest percentage drop in planning application at -37%, -31% and -28% respectively. Nationwide percentages of applications were rising from January to May but have again slipped back and are now dropping. Only four counties show planning application increases: Kildare (10%), Dublin (7%), Carlow (4%) and Longford (4%). However this is up on the same period of last year when only three counties saw increases.  Interestingly there was a complete reversal of certain counties performances. For example last year Kildare had the highest percentage drop (-41%), whereas this year it had the highest percentage increase (10%) in planning applications. Similarly last year Leitrim reversed its performance but for the worse, from ranking the highest percentage increase (14%) in applications made last year to the lowest (-31%)this year.

Commencement notices fall but four counties exhibit increase including Dublin Commencement increases were seen in four counties: Roscommon (41%), Wexford (19%), Monaghan (10%) and Dublin (9%). This is in line with the same period for last year. Significantly though there were some huge shifts in certain counties positions from last year. For example, Westmeath had the biggest reversal in construction performance in 12 months going from the highest percentage increase (13%) in commencements last year, to the highest commencement drop (-61%) this year. Cavan also showed a reversal in its performance from having a 5% increase in commencements last year to experiencing a drop of -36% in commencements this year. Counties that also showed a positive performance reversal are Roscommon (-38%) and Monaghan (-29%). They had the highest commencement drop from January to June last year yet compared to the same period this year they both have had the first and third highest increase in planning commencements at 41% and 10% respectively.

According to Managing Director of Link2Plans Danny O’Shea, “The Link2Plans team have seen significant changes in activity throughout the country which in part can be explained by the weather conditions in the first few months of 2013. There are however clear signs that the growth in residential construction activity is being felt in Dublin and other counties are still some way back. It will be interesting to see if the dry weather experienced throughout June and July will see the next edition of the index, register an increase in project commencements.”