Friday, June 15, 2012

15/6/2012: Q1 2012 Construction Sector Activity for Ireland

Having dealt with leading indicator for Construction sector activity - Ulster Bank PMIs - in the previous post, now's the time to update the latest actual outrun figures from the CSO that cover Q1 2012. Keep in mind - core conclusion in the previous analysis showed no signs of uptick in activity in the sector, with housing and commercial real estate construction activity continuing to shrink.

Pre latest CSO data:

  • In Q1 2012 Value of all activity ex-Civil Engineering has fallen to 18.7 against 20.6 in Q4 2011. Quarterly rate of decline therefore is -9.22% for value against the annual rate of decline of -13.4%. Y/y rate of decline accelerate from Q4 2011 when it was 8.4%. Over last 6 months the index declined -5.07% compared to previous 6 months and -10.88% y/y. Q1 2012 marks an absolute record low activity by value in the broader construction sector ex-civil engineering.
  • In Q1 2012 Volume of all activity ex-Civil Engineering fell to 16.7 from 18.5 in Q4 2011, marking another record low for the series. Year on year, the index has fallen 13%, which represents the sharpest contraction in four consecutive quarters. Quarter on quarter the index is down 9.73%. Things are getting much worse, rather than less worse. Over the last six months, average index reading fell 5.38% compared to previous six months average and year on year last six months average is down 9.51%.
  • Relative to peak, value of construction production ex-civil engineering now stands at just 16.45% of the peak levels and volume of activity is now at 15.70% of the peak levels, both showing record declines.

For Civil Engineering sub-sector - the very same trends are true, with one exception - the rate of declines in activity slowed, not accelerated, in Q1 2012. Alas, we are thus in the case of getting worse more slowly, which is, as I like pointing out, not the same as getting better.

Value of Residential Construction fell to 9.4 in Q1 2012 against 9.7 in Q4 2011. The index declined 1.4% y/y and is now down, on average 4.5% in the last six months compared to previous six months. Year on year, average activity in the last six months fell 18.03%. Now, keep in mind, Residential Construction is now running at 91.75% below its peak pre-crisis levels.

Volume of Residential Construction fell to 8.5 from 8.8 in Q4 2011, a decline of 15% y/y. Average activity for the last six months was down 4.95% on previous six months and down 15.61% on same period a year ago. Relative to peak, volume of residential construction is now down 91.76%.

Per chart above, Value of Non-Residential construction declined to 53.8 in Q1 2012 from 62.4 9n Q4 2011, marking annual decline rate of 12.4%. Average six months activity is now down 5.53% on previous sexi months period and is down 5.83% on the same period a year ago. Relative to peak, non-residential construction value is down 56.37%.

Volume of Non-Residential construction activity dropped to 47.8 from 56.6 in Q4 2011. Annual rate of decline in Q1 2012 of -12% comes on foot of an annual increase of 3.3% in Q4 2011. 6mos average through Q1 2012 is now 5.43% below the previous 6mo period and is 4.31% below same period a year ago.

Chart below illustrates annual changes.

So the very same trends shown by the PMIs are present in the actual data. Once again, where's all that pinned up demand for new offices and facilities, for retrofits of facilities and for fit-outs that were supposed to come with the 'robust jobs creation' by the MNCs?

No comments: