Building Information Index
Q1-Q4
2017
2015 2016201720
www.buildinginfo.ie
Visit www.BuildingInfo.ie and register for a FREE TRIAL today! To download past editions of the Building Information Index, visit: www.buildinginfo.ie/publications Tel: 01 905 3200 Email: info@buildinginfo.ie
Q1-Q4
2017
Welcome to the latest volume of the Building Information Index brought to you by Building Information Ireland www.buildinginfo.ie. In this year-end volume of the Building Information Index the levels of activity in the construction industry are compared and analysed across the 3 full year periods of 2015, 2016 & 2017. The activity is broken down into key sectors and regions, and also across important stages of the construction and planning lifecycle.
commenced in the year. Growth was recorded in 6 of the 7 sectors analysed with only Industrial project commencement activity showing a year on year decline. Dublin continues to dominate the industry where over 51% of the entire country commencements took place in 2017. This trend is growing with the same calculation last year showing Dublin at 45%.
The key message displayed in the findings of this Index is that output has increased steadily year on year over the 3 year period and will continue to grow in the short to medium term. While the growth rate may be slowing marginally, we forecast growth in the region of 9% for 2018 with the likelihood of positive growth continuing into 2019. The Building Information Index is measured by factors that correlate with the phases in a construction project. The first is project Commencements which relate to projects that are in progress on-site and where construction activity has started. The second is Applications which are a real time barometer of sentiment in the construction sector and relate to all projects yet to be approved for planning. Thirdly we look at projects that have been granted permission. This show projects that are further along in the cycle, and being approved, they show more short term potential in the market.
Residential developments accounts for 54% of Project Commencements in 2017 which is consistent with 2016 and shows the importance it is to the industry as a whole. V alue of Applications up +11% The value of construction project Applications is up +11% in 2017 and +16% for the 2 year period to 2015. Overall, the pipeline of project Applications was €23.2bn for 2017, up from €20.8bn in 2016. Again Dublin accounts for the largest share, but the percentage is falling, and now stands at just under 39% of the overall, compared with 44% last year.
Value of construction project Commencements grows by +31% in 2017
Residential projects also make up the lion’s share of project Applications with €14.9bn worth of applications, just over 64% of all applications by volume. Commercial & Retail, the second largest sector recorded a decrease in Applications, -13%, as did 4 other sectors in 2017. This points to a potential cooling off in construction output in the medium term with growth rates remaining in single digits at best through 2019 and 2020.
The value of Construction Project Commencements grows by +31% in 2017 when compared with 2016. The value is up +67% when compared with 2015. Construction projects with a combined value of €10.7bn
Danny O’Shea CEO Building Information Ireland
2
THE BIG PICTURE Regional Applications The Building Information Index breaks out Planning Applications into four regions: Dublin, Leinster, Munster and Connacht / Ulster.
2015 €20 BN 2016 €21 BN 2017 €23 BN
The value of construction project Applications is up +11% in 2017 to €23.2bn. When broken out regionally Connacht / Ulster is up +26%, Munster is up +21%, Leinster is up +20% while Dublin has dropped slightly, -2%. This points to a gradual balancing of distribution of activity regionally, with Dublin slowing and the rest of the country catching up. This future slowdown in Dublin is also seen in Applications granted permission in 2017, which is down -22% while all other regions are all still growing. This is not reflected in current activity though, with Dublin still showing strongest growth in project Commencements in 2017 at €5.5bn, up +48% on 2016. .
CONNACHT ULSTER
€2.54 BN +26%
DUBLIN LEINSTER
€6.63 BN +20%
MUNSTER
€5.1 BN +21%
BUILDING INFORMATION INDEX
€8.96 BN -2%
Q1-Q4
2017
Connacht/Ulster Applications
Grants
Dublin Commencements
Applications
€2.54 bn €1.72 bn
€873 m
€8.96 bn €7.26 bn €5.47 bn
+26%
+20%
-2%
+21%
Grants
Commencements
-22%
+48%
Applications
2017
2016
2015
2017
2015
Munster
2016
€0 2015
€0
2017
€2 bn 2017
€.5 bn 2016
€4 bn
2015
€1 bn
2017
€6 bn
2016
€1.5 bn
2015
€8 bn
2017
€2 bn
2016
€10 bn
2015
€2.5 bn
2016
€3 bn
Leinster Grants
Commencements
Applications
€5.06 bn €3.11 bn
€1.82 bn
€6.63 bn €4.22 bn
€2.54 bn
+21%
+13%
+20%
+20%
+18%
Grants
Commencements
+33%
2017
2016
2015
2017
€0 2016
€0
2015
€1 bn
2017
€1 bn
2016
€2 bn
2017
€2 bn
2016
€3 bn
2015
€3 bn
2017
€4 bn
2016
€4 bn
2015
€5 bn
2017
€5 bn
2016
€6 bn
2015
€6 bn
2015
€7 bn
www.buildinginfo.ie
4
RESIDENTIAL
The Residential sector continues to grow in terms of all 3 stages – Applications, Granted Permissions and Commencements.
Activity trends 2015/2016/2017
Applications
Grants
Commencements
€14.85 bn
€9.08 bn
€5.76 bn
+30%
+14%
+30%
The Building Information Index now includes information on self build projects as part of it’s calculations. The value of Residential Applications grew by 30% year on year to €14.9bn in 2017 when compared with 2016. Granted Permissions grew by 14% and Commencements were up 30% to almost €5.8bn.
€16 bn €14 bn
Applications were up in all regions analysed. Permissions Granted were down slightly in Dublin by -11%. An increase of 12% is seen in Connacht Ulster driven mainly by Self Build projects. There were also strong increases in the other 2 regions. Munster Commencements were down -6%, with Dublin, Leinster & Connacht / Ulster showing strong gains throughout 2017.
€12 bn €10 bn €8 bn €6 bn €4 bn €2 bn
2017
2016
2015
2017
2016
2015
2017
2016
2015
€0
Notably, the lead in time for Residential developments continues to fall, now standing at 98 weeks from Application to Commencement. This points to continued optimism in the sector as it draws closer to the industry average of 69 weeks.
Average time from application to commencement 69 weeks
INDUSTRY AVG
98 weeks
RESIDENTIAL
The Residential sector includes projects such as housing developments, apartments, mixed developments & one off houses BUILDING INFORMATION INDEX
Q1-Q4
2017
Sector outlook Strong growth in both activity and the future pipeline of activity, points to sustained strong growth in the sector in both the short term and the medium term.
Q1-Q4 2017 applications regional distribution
CONNACHT/ULSTER
€1.48 BN
DUBLIN
38%
€5.40 BN 22%
6903
3959
2226
LEINSTER
+56%
+28%
+49%
€4.75 BN 30%
MUNSTER
21520 13056
9251
+26%
+63%
+48%
21938
16150
10119
+14%
+10%
+34%
€3.22 BN 38%
14251
8688
4219
+49%
+83%
+5%
No. of residential units
www.buildinginfo.ie
6
COMMERCIAL & RETAIL
Applications and Granted Permissions were both down in value in 2017 when compared with 2016, while Commencements were up significantly.
Activity trends 2015/2016/2017 Applications
Grants
Commencements
€4.50 bn
€3.82 bn
€2.25 bn
-13%
-11%
+34%
€6 bn
Permissions Granted were also down, with a decrease of -11% on 2016. This decrease was felt in all regions except Connacht / Ulster which recorded a significant increase in Permissions Granted +62% to €354m in 2017. This was bolstered considerably by a Mixed Use Office Development proposed in Galway with a value of over €93m.
€5 bn
€4 bn
€3 bn
Commencements saw growth in Dublin and Munster, with declines in Leinster and Connacht / Ulster. Overall, Commencements for the year were up 34% on 2016 to €2.2bn.
€2 bn
2017
2016
2015
2017
2016
2015
2017
2016
2015
€1 bn
€0
In the Commercial & Retail sector, the value of Applications was down -13% year on year to €4.5bn when compared with 2016. This decrease was mainly in Dublin and the rest of Leinster, with Munster and Connacht / Ulster both showing gains.
Average time from application to commencement 69 weeks
INDUSTRY AVG
53 weeks
COMMERCIAL & RETAIL
BUILDING INFORMATION INDEX
The Commercial & Retail sector includes projects such as offices, shops, hotels, bars & restaurants
Q1-Q4
2017
Sector outlook The Commercial & Retail sector will continue at its current levels with no significant growth or decline forecast in the short term.
Q1-Q4 2017 applications regional distribution
CONNACHT/ULSTER
€413 M
DUBLIN
37%
€2.66 BN -22%
LEINSTER
€550 M -10%
MUNSTER
€882 M 3%
www.buildinginfo.ie
8
MEDICAL
The Medical sector shows a slight decrease in Applications in 2017, with a large decrease in Permissions Granted. Commencements were up significantly in the year.
Activity trends 2015/2016/2017 Applications
Grants
Commencements
€960 m
€838 m
€1.44 bn
-4%
-56%
+161%
The value of applications fell slightly in the year -4% to €960m. This was mostly felt in Dublin and Leinster. Permissions Granted fell by -56% to €838m, with the majority of this decrease because of the National Children’s Hospital development being granted in 2016. Beyond this project, there were still some small declines in the sector across all regions.
€2.5 bn
€2 bn €1.5 bn
€1 bn €500 m
2017
2016
2015
2017
2016
2015
2017
2016
€0 2015
The National Children’s Hospital continues to dominate this sector making it difficult to assess.
Conversely, the value of Commencements in the sector grew sharply +161% to €1.4bn, again due to the start of the Children’s Hospital development. Excluding this project, the commencements elsewhere have declined in the year as capital expenditure is soaked up with this one development.
Average time from application to commencement 69 weeks
INDUSTRY AVG
68 weeks
MEDICAL
BUILDING INFORMATION INDEX
The Medical sector includes projects such as hospitals, medical centres & care homes
Q1-Q4
2017
Sector outlook Mild growth in the sector is likely in the short term but with so much activity dependent on one major project, we see the outlook as being neutral.
Q1-Q4 2017 applications regional distribution
CONNACHT/ULSTER
€171 M
DUBLIN
19%
€347 M -12%
LEINSTER
€223 M -13%
MUNSTER
€219 M 8%
www.buildinginfo.ie
10
EDUCATION
2017 shows decreases in Applications and Permissions Granted in 2017 when compared with 2016. A small increase in Commencements was recorded in the same period.
Activity trends 2015/2016/2017 Applications
Grants
Commencements
€368 m
€375 m
€372 m
-34%
-34%
+3%
The value of Applications decreased by -34% in 2017 versus 2016, with this decrease felt across all regions of the country, most notably in Dublin which had a decrease in Applications of -53%. The value of Granted Permissions also fell by -34% nationally, and again Dublin was the most affected region. Connacht / Ulster saw a gain of 24% for the year, albeit from a low value in 2016.
€8 bn €7 bn
Commencements in the sector has a small year on year increase of +3% to €372m. This is due to an increase in projects starting in Dublin (+61%) with declines in all other regions.
€6 bn €5 bn
With the shortest turnaround in duration of all sectors, currently 51 weeks, the declining pipeline of projects could become a decline in activity in the short term.
€4 bn €3 bn €2 bn
2017
2016
2015
2017
2016
2015
2017
2016
2015
€1 bn
Average time from application to commencement 69 weeks 51 weeks
INDUSTRY AVG EDUCATION
BUILDING INFORMATION INDEX
The Education sector includes projects such as universities, schools & pre schools
Q1-Q4
2017
Sector outlook A negative outlook in the Education sector remains and this is unchanged from the Building Information Ireland H1 2017 Index. Activity remains relatively low with a declining pipeline of projects to come on stream.
Q1-Q4 2017 applications regional distribution
CONNACHT/ULSTER
€69 M
DUBLIN
-15%
€116 M -53%
LEINSTER
€79 M -5%
MUNSTER
€104 bn -29%
www.buildinginfo.ie
12
AGRICULTURE
New Applications and Granted Permissions for Agricultural projects have seen a marginal decline when comparing 2017 with 2016. Commencements however are up +21% in the same period.
Activity trends 2015/2016/2017 Applications
Grants
Commencements
€276 m
€223 m
€60 m
-1%
-3%
+21%
€300 m
The value of Applications in the sector is down -1% on 2016 levels. This is the net effect of a small increase in Leinster coupled with slight decreases in Munster and Connacht / Ulster. The trend is very similar for Granted Permissions which were down -3% overall in the year. Leinster was up +2% and Munster (-8%) and Connacht /Ulster (-1%) were both down.
€250 m
€200 m
Project Commencements have increased in the year overall by +21% to €60m. Leinster has the largest gains, with Connacht / Ulster also in positive territory. Munster was the only region to show a decline in Commencements in 2017, -37% to €14m.
€150 m
€100 m
€50 m
2017
2016
2015
2017
2016
2015
2017
2016
2015
€0
Average time from application to commencement 69 weeks
INDUSTRY AVG
63 weeks
AGRICULTURE
BUILDING INFORMATION INDEX
The Agriculture sector includes projects such as dairy units, poultry houses & slatted sheds
Q1-Q4
2017
Sector outlook With project Commencements showing some signs of growth, and the future pipeline in marginal decline we see no major changes in activity in the short to medium term.
Q1-Q4 2017 applications regional distribution
CONNACHT ULSTER
€78 M -2%
LEINSTER
€91 M 6%
MUNSTER
€107 M -6%
www.buildinginfo.ie
14
INDUSTRIAL
The Industrial sector shows a decline in Applications in 2017 compared with 2016. While there is an increase in the value of Granted Permissions, there is also a decline in Commencements for the year.
Activity trends 2015/2016/2017 Applications
Grants
Commencements
€1.18 bn
€1.29 bn
€569 m
-31%
+14%
-34%
The value of Applications in the Industrial sector was down -31% in 2017 with the decline felt in all regions of the country. Granted Permissions were up 14% nationally with Leinster, Munster and Connacht / Ulster all showing gains. Dublin however had a decline in Granted Permissions for the year, down -38% to €294m.
€1.8 bn €1.6 bn €1.4 bn
Commencements were down nationally by -34% to €569m. The decline was mainly felt in Dublin and Leinster, with Munster and Connacht / Ulster both recording gains for the year.
€1.2 bn €1 bn €800 m
The Application to Commencement duration also slowed slightly in 2017 to 59 weeks on average suggesting some negative sentiment in the sector.
€600 m €400 m €200 m
2017
2016
2015
2017
2016
2015
2017
2016
2015
€0
Average time from application to commencement 69 weeks
INDUSTRY AVG
59 weeks
INDUSTRIAL
BUILDING INFORMATION INDEX
The Industrial sector includes projects such as factories, warehouses & industrial units
Q1-Q4
2017
Sector outlook The Industrial sector just about holds its neutral outlook going into 2018 with the potential for it to become negative as the year progresses.
Q1-Q4 2017 applications regional distribution
CONNACHT/ULSTER
€123 M
DUBLIN
-47%
€269 M -41%
LEINSTER
€445 M -31%
MUNSTER
€343 M -12%
www.buildinginfo.ie
16
SOCIAL
The Social sector continues to rebound well from a poor position in 2016. Applications, Granted Permissions, and Commencements are all showing signs of growth.
Activity trends 2015/2016/2017 Applications
Grants
Commencements
€1.06 bn
€679 m
€250 m
+56%
+59%
+22%
The value of Applications in the Social sector has increased by +56% nationally to €1.1bn. With a decline in Dublin, all other regions have shown strong growth in 2017 when compared with 2016. Granted Permissions are up in all regions, with a national increase of 59%.
€1.2 bn €1 bn
Project Commencements in the sector have decreased in Dublin (-9%) and in Connacht / Ulster (-37%), but growth in Leinster and Munster at +97% and +21% respectively leave the overall national average +22% higher than in 2016.
€800 m €600 m €400 m €200 m
2017
2016
2015
2017
2016
2015
2017
2016
2015
€0
Growth in activity will continue in the Social sector in the medium term.
Average time from application to commencement 69 weeks
INDUSTRY AVG
78 weeks
SOCIAL
BUILDING INFORMATION INDEX
The Social sector includes projects such as sports developments, community projects, churches & public buildings
Q1-Q4
2017
Sector outlook This continues to be the best performing sector with strong growth predicted through 2018 and into 2019.
Q1-Q4 2017 applications regional distribution
CONNACHT ULSTER DUBLIN
€207 M
€172 M
86%
-20%
LEINSTER
€498 M 158%
MUNSTER
€183 M 14%
www.buildinginfo.ie
For full details on all projects aggregated to produce The Building Information Index visit www.BuildingInfo.ie and register for our free access all areas trial. Methodology: www.buildinginfo.ie measures the actual (estimated) monetary value of every construction project per sector. The data contained in the Building Information Index is aggregated by Building Information from real time planning and project information. Projects with a value of less than ₏200k were omitted from this index. Disclaimer: The Building Information Index is prepared from information that is provided by local authorities under planning and building control regulations. We believe that the index is collated with care from data available at the time of publishing, but we do not make any statement as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the indices, or analysis at any time. Persons seeking to place reliance on any information contained in this index for their own or third party commercial purposes do so at their own risk. About the author: Danny O’Shea is Managing Director of Building Information Ireland and Residential Construction research consultancy Link2Plans. Building Information Ireland is the portal for every current planning application, approval and commencement in the country. Previously Danny was Managing Director at Riverside Manufacturing (Ireland). Danny holds a Diploma in Computing (1986) and an MBA from DKIT (2006) and has been involved in systems development, management, innovation and online development for the past 25 years.
Visit www.BuildingInfo.ie and register for a FREE TRIAL today!
Building Information Ireland Rosemount House, Northern Cross, Malahide Road, Dublin 17, Ireland Tel: 01 905 3200 Email: info@buildinginfo.ie