Thursday, September 25, 2014

25/9/2014: Irish Planning Permissions Q2 2014: No Signs of Sustained Recovery, Yet...


CSO released planning permissions data for Q2 2014 (release here), so here are updated charts:

Starting from Total Number of Planning Permissions Granted: this rose in Q2 2014 to 4,149 which is up 8.24% q/q. In Q1 2014, total number of PPs granted was up massive 13.3% y/y down to anticipated changes in regulations. Year on year, Q2 2014 numbers were up 23.19% - which is significant. Alas, increases took place off a very shallow level of activity, with Q2 numbers down 76.1% on pre-crisis peak and down 4.42% on 1975-1999 minimum (lowest point in activity for that period). So current level of PPs is still lower than in any quarter between Q1 1975 and Q4 2010. On the somewhat positive side, current level is the highest since Q3 2011.


Still, as chart above shows, the post Q1 2012 trend remains flat (aka, there is no sustained recovery, yet).

Planning permissions granted for dwellings are showing even worse performance. These were up 18.64 q/q in Q1 2014 and are now down 1.8% in Q2 2014. However, y/y PPs for Dwellings are up 13.34%. The wild volatility ride continues in the series and the trend is still flat, showing no real recovery. Compared to pre-crisis peak, current activity is down 88.4% and relative to 1975-1999 minimum level of activity, Q2 2014 figures stand at the levels 40% lower than the worst point recorded in 1975-1999. This quarter marks the fifth worst quarter on record.


Chart above shows clearly that the trend has been flat since roughly Q1 2013.

Floor area underlying granted PPs is tanking, again, as illustrated in the chart below:


And with it, the average floor area per granted permission:


So here is the summary of H1 cumulative figures for 2014, compared to 2011-2012:

  • Planning Permission granted for all types of construction rose to 7,982 in H1 2014 from 6,643 in H1 2013 and 7,040 in H1 2012. But total floor area underlying these permissions fell from 1,558, 000 sq.m. in H1 2011 and 1,764,000 sq.m. in H1 2013 to 1,456,000 sq.m. in H1 2014.
  • Planning Permissions for Dwellings stood at 1,766 in H1 2014, up on 1,634 in H1 2013, but down on 1,899 in H1 2012. Total floor area associated with PPs for Dwellings stood at 563,000 sq.m. in H1 2012, rising to 727,000 sq.m. in H1 2013 and falling to 632,000 sq.m. in H1 2014.
In other words, I am failing to see any sustained upward momentum in future work pipelines for the construction sector. Backlog of past permissions might be working through the latest optimistic outlooks for the construction sector, but as far as genuine new activity goes, we are not there yet.
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