Saturday, July 9, 2011

09/07/2011: Construction Activity : Ireland 1980-2010

Rummaging through the Federal Reserve database, I came across a fascinating set of numbers on the number of construction permits issued in Ireland. These are based on index with 100=2005 level of activity.
  • By the end of 2010, new dwelling construction activity has fallen from the high of 102.4 attained in 2004 to the low of 15.3.
  • Year on year, 2010 activity was down 56.8%. 2010 marks a decline of 80.7% on 5 years ago, 80.6% decline on 10 years ago, 56.4% decline on 15 years ago, 26.1% decline on 20 years ago, 8.5% rise on 25 years ago and 58% decline on 30 years ago.
  • The only sustained decline period - other than current - was 1983-1996 period, when activity dropped from 35.2 in 1983 to the trough of 12.8 in 1988 - 4 years of decline and the cumulative drop of 63.6% (much more benign that the current drop of 85.1% to the end of 2010). The recovery in that contraction took over 13 years.
So we had a cycle of over 17 years and if one were to count 1981 as a peak with 1982-1983 as a temporary bounce, then the last cycle took 19 years to unwind. Good luck to anyone still hoping for a return to "normal" unless your normal is pre-boom average activity at 51-52 or roughly a half of the construction activity in 2004-2005.

Here's the chart:
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