Showing posts with label Fixed capital investment in Ireland. Show all posts
Showing posts with label Fixed capital investment in Ireland. Show all posts

Thursday, April 24, 2014

24/4/2014: Where's that Fabled Property Boom in Ireland?..


Throughout 2013 and indeed starting from as far back as mid-2011, there has been a never-ending stream of 'good news' stories from the property markets. Many are real. Many are unverifiable. Some a complete nonsense.

Here is one forward-looking indicator for the health of the property market: planning permissions granted. And courtesy of CSO we can now update Q4 2013 data and thus compute full year 2013 results.

Here they are:

  1. Planning permissions granted for All Types of Construction fell 3.5% y/y in 2013 to an absolute historical minimum of 13,901 (data from 1992). Between 2011 and 2013 total number of planning permissions is down 13.1%. Compared to peak, these are now down 77.7%. There is no turnaround in sight judging by these numbers. In fact, 2013 was 6th consecutive year of y/y declines.
  2. Planning permissions granted for dwelling fell even more steeply: down 9% y/y in 2013 and down 23.6% since 2011. These too are now at historical low and in decline for seven years in a row. There is no turnaround here either.
  3. Other new construction (ex-dwellings) planning permissions posted a rise of 0.7% y/y in 2013 and are up 14.9% on 2011 levels. However, at 3,431 total, these are 4th lowest in history and below the levels recorded in any year between 1992 and 2009. Relative to peak these are down 82%, so steep increase since 2011 was (a) exhausted in 2013 (given weak 0.7% rise) and (b) appears to be based on sheer magnitude of the permissions collapse at the height of the crisis. Still, we might call this some evidence of something that might signal a turnaround.
  4. Planning permissions granted for extensions fell 3.6% y/y in 2013 and are down 12% on 2011 levels. These series hit absolute historical low in 2013 and mark 6 consecutive years of declines. 
  5. Planning permissions granted for alteration, conversion and renovation purposes rose 0.8% y/y in 2013, with series down 6.6% on 2011 levels. 2013 was the second lowest year on record. Again, this evidence is not consistent with a turnaround.
Two charts to illustrate:


In terms of floor area approved:
  1. 2013 saw increases of 4.4% y/y for all types of planning permissions granted. However, the increase was from the levels that were so low that even with 4.4% rise in 2013, 2013 levels are still 21.6% below those in 2011. 
  2. 2013 was the second lowest year on record for planning permissions (by floor area) granted for All Types of Properties, for dwellings, for other properties ex-dwellings.
  3. 2013 was the worst year on record for planning permissions granted on the basis of floor area for extensions.

Key takeaway: Planning permissions granted data shows no signs of a turnaround in building & construction sector in Ireland in 2013 and no signal of such turnaround in early 2014 either.

Wednesday, September 25, 2013

25/9/2013: Planning Permissions, Ireland, Q2 2013 and H1 2013

Q2 data for Planning Permissions Granted in Ireland is out today and on the surface it offers some good news reading.

Per CSO: In the second quarter of 2013, planning permissions were granted for 1,926 dwelling units, compared with 1,406 units for the same period in 2012, an increase of 37.0%.

In addition:
  • Planning Permissions were granted for 1,496 houses in the Q2 2013 an increase of 28.3% y/y.
  • Planning permissions were granted for 430 apartment units, an increase of 79.2% y/y. 
  • The total number of planning permissions granted for all developments was 3,368. This compares with 3,672 in the second quarter of 2012, a decrease of 8.3% y/y. 
  • Total floor area planned was 834 thousand square metres in the second quarter of 2013. Of this, 39.9% was for new dwellings, 39.7% for other new constructions and 20.4% for extensions. The total floor area planned increased by 1.2% in comparison with the same quarter in 2012. 

Some encouraging signs up there… although if you think the crisis is over, here's a handy chart from CSO:
The above, as CSO notes, puts things into perspective: we are starting from exceptionally low levels, so even a small uptick translates into large percentage changes. Still, I am happy to spot an improvement.

Now, let's take a closer look. I am dealing from here on with permissions issued, not units covered by these permissions.

  • Total number of planning permissions was down at 3,368 in Q2 2013, a decline of 8.28% y/y. In Q1 2013 there was a decline of 2.76% y/y, so rate of decline increased from the beginning of the year.
  • Total number of planning permissions in H1 2013 stood at 6,643 - down 5.64% y/y.
  • Total number of new permissions for dwellings granted in Q2 2013 was 772, which is down 18.05% y/y, which compares to 9.93% drop recorded in Q1 2013.
  • Total number of planning permissions for dwellings in H1 2013 stood at 1,634 - down massive 13.95% y/y.
  • Total number of new permissions for other new construction (ex-dwellings) granted in Q2 2013 was 754, which is down 8.94% y/y, which compares to a rise of 12.95% recorded in Q1 2013.
  • Total number of planning permissions for other new construction (ex-dwellings) in H1 2013 stood at 1,539 - up barely noticeable 1.05% y/y. At least these series were up.
  • Total number of permissions for extensions granted in Q2 2013 was 1,489, which is down 3.87% y/y, which compares to a decline of 3.21% recorded in Q1 2013.
  • Total number of planning permissions for extensions in H1 2013 stood at 2,785 - down 3.57% y/y.
  • Total number of permissions for alterations, conversions and renovations granted in Q2 2013 was 353, which is unchanged y/y, and compares to a decline of 11.94% recorded in Q1 2013.
  • Total number of planning permissions for ACRs in H1 2013 stood at 685 - down 6.16% y/y.

So in terms of actual permissions issued: we have a bit of a soggy outcome: nothing is up, everything is down y/y… Declines have accelerated in Q2 compared to Q1 in four out of five categories; and H1 figures are very poor for all, but one category. In terms of units approved: we have a decent uptick. I would suggest we use caution and see if the activity picks up from here on.

Three charts to illustrate:



Friday, March 8, 2013

8/3/2013: Industrial Investment in Ireland 2012


Summary of the capital acquisitions in Irish industry over time:
 and by broad sectors:

Key conclusion: no restart of investment cycle in the Industry in 2012, including the MNCs. Stripping out Pharma sector, net acquisitions of capital in 2012 were at EUR2,516.3mln down from 2011 EUR2547.8mln, and roughly equivalent to the average of 2008-2011 period of EUR2,511.5mln.

Note: all data is based on today's update by the CSO. See http://cso.ie/en/releasesandpublications/er/cai/capitalassetsinindustryquarter42012/#.UToLydFHBF8

Thursday, September 27, 2012

27/9/2012: Planning Permissions, Ireland, Q2 2012


Planning Permissions for Q2 2012 were published today for Ireland, offering basically continuation of the trend established the end of 2010 which marks slower rate of decline in overall planning permissions. Chart below illustrates:


Total number of planning permissions rose 9.03% q/q in Q2 2012 to 3,672 (still 13.48% down on Q2 2011 and 78.8% down on peak).

In Q2 2012, overall number of planning permissions in Ireland for new dwellings dropped to 942 from 957 in Q1 2012 (-1.57% q/q), which is down 25.47% y/y and down 87.5% on peak. In contrast with new dwellings, other new construction permissions rose from 695 in Q1 2012 to 828 in Q2 2012 (up 19.14% q/q and up 14.84% y/y), which is still down 86.7% on peak.


Annual rates of change clearly show that the slowdown in the rate of decline is now persistent over two quarters for total number of planning permissions, while there is an acceleration in the rate of decline in the planning permissions for new dwellings.


Average square footage relating to new permissions granted is now moving sideways since Q3 2011, suggesting there is really no life in the market for new construction, even in the potential pipeline of work planned.

Sorry to say this, but no good news here.

Friday, June 29, 2012

29/6/2012: Irish Planning Permissions: Q1 2012

After 5 years of continued destruction in the construction sector in Ireland, one simply has to re-test the accepted paradigms that things can continue falling indefinitely. I mean, yes, there's a bound to how far down new construction permits for new dwellings can go, but... who would have thought it might be a zero?

Here are the latest stats on approved Planning Permissions in Ireland for Q1 2012. Not a pretty sight - be warned.

In Q1 2012, number of new planning permissions for new dwellings stood at 957 - a new all-time low for Q1 figures, up 0.2% on Q4 2011, but down 25.1% year on year. Compared to peak, the number of new dwellings being planned in Ireland is now down 87.3%.

Other New Construction permits rose to 695 in Q1 compared to 681 in Q4 2011, but Q1 figure this year is the lowest of all Q1 readings in history. Y/y permits are down 0.7% and compared to the peak, they are down 88.8%.

Extensions approvals rose from 1,312 in Q4 2011 to 1,339 in Q1 2012, marking another historical low for Q1 figures, down 18.2% y/y and now 74.3% below their peak.

Alterations and Conversions permits rose to 377 from 335 in Q4 2011 and are now at a new historical low for Q1 readings. Y/y permits dropped 6.9% and relative to peak they are down 55.0%.

Thus, total construction permits awarded are now at 3,368 in Q1 2012, new historical low for Q1 readings, but up on 3,283 in Q4 2011. Y/y all construction permits are down 16.2% and reltive to peak they are off 80.6%.

These are ugly numbers, folks.

Charts to illustrate:





Monday, March 26, 2012

26/3/2012: QNA Q4 2011 - Part 5



In the first post on QNA results for 2011 I covered data for annual GDP and GNP in constant prices terms. The second post focused on GDP/GNP gap and the cost of the ongoing Great Recession on the potential GDP and GNP. The third post focused on quarterly sectoral decomposition of GDP and GNP in constant prices terms. And a short digression from QNA results here showed how difficult it is, really, to reach any consensus on some of Ireland's economic performance parameters. Following these, Part 4 of QNA analysis focused on nominal (current prices) quarterly data. 


In this and subsequent posts I will provide some brief snapshots of specific points of interest arising from the QNA data. This post will focus on capital investment decline during the crisis.



As chart above clearly shows, in real terms (controlling for inflation):

  • Gross fixed capital formation stood at €16,924 million in 2011, which was 10.87% below the levels of gross investment in 2010 and 57.17% below the levels of investment at the peak of pre-crisis activity in 2007.
  • Cumulated gross fixed capital investment in the ten years of 2001-2010 was €311,111mln, which at 8% annual amortization & depreciation rate implies demand for €24,889mln in gross financing to maintain. Thus gross fixed capital formation came in some €7,965mln short of amortization & depreciation requirements of the economy.
  • Current level of gross fixed capital formation is consistent with €16,852mln attained in 1996 - remember, these are in constant prices.

In current market prices terms, Gross fixed capital formation in Q4 2011 was 1.9% below that in Q4 2010 and 66.8% below Q4 2007 levels. In Q3 2011, capital investment was down 18.3% yoy.


These figures show that Irish economy is equivalent to a body that consumes itself. It also shows that the alleged 'huge FDI inflows' are not sufficient to offset for domestic capital investment collapse.

Wednesday, December 21, 2011

21/12/2011: Irish Planning Permission Q3 2011


In Q3 2011, there were 2,512 planning permissions granted for dwelling units, compared with 4,641 units for the same period in 2010, a yoy decrease of 45.9 %.

However, overall, Q3 2011 number of new dwellings approved stood at 1,271, up 0.55% qoq and down 22% yoy. Relative to peak in Q2 2004, the number of new dwelling units approved declined 83.2% in Q3 2011.

Per CSO: 
  • Planning Permissions were granted for 1,887 houses in the third quarter of 2011 and 2,817 in the third quarter of 2010, a decrease of 33.0%. 
  • Planning permissions were granted for 625 apartment units, compared with 1,824 units for the same period in 2010, a decrease of 65.7%.
  • Total floor area planned was 969 thousand square metres in the third quarter of 2011. Of this, 48.0% was for new dwellings, 29.7% for other new constructions and 22.3% for extensions. The total floor area planned decreased by 31.4% in comparison with the same quarter in 2010.
  • Planning Permissions for new buildings for Agriculture rose to 194 this quarter. This compares to 132 permissions in the same quarter of 2010.
More detailed analysis of CSO data shows that total number of new permissions rose 4.76% qoq in Q3 2011 from 4,244 in Q2 2011 to 4,446. However, Q3 2011 total number of permissions was down 16% yoy and down 74.4% on the peak attained in Q3 2007.

Charts below illustrate: