Construction grows again in Republic after three-month slowdown

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Construction began growing again in December following a three-month slowdown in the Republic, the latest figures show.

Ulster Bank’s construction purchasing managers’ index (PMI) shows that activity in commercial development and housebuilding increased last month, while work on public projects continued falling but at a slower pace than previously.

The pick-up in two of the industry’s three key sectors meant growth returned in December following a three-month slowdown in activity.

The index, which follows the sector’s performance every month, reached 52 in December, indicating that the industry grew during the month.

Ulster’s PMI takes 50 as its benchmark. Any reading above that figure means that the industry expanded on the previous month, while any result below that shows that it shrank. November’s reading was 48.2.

Simon Barry, chief economist for the Republic at Ulster Bank, welcomed the return to growth in building last month.

“Indeed, following a three-month sequence of falling activity the headline PMI index rose sharply last month to get back to above the 50 breakeven level for the first time since August,” he said

“Reduced Brexit uncertainty was cited as a source of support for the increase in overall activity at the end of 2019, while the improvement also reflected better performance across the three main sub-sectors.”

Mr Barry noted that housebuilding grew in December, supporting a view that Brexit fears were behind the slowdown over the previous three months.

“Meanwhile, commercial activity saw a further acceleration in its rate of expansion last month, in the process remaining the fastest-growing sub-sector,” he added.

Housing activity reached 51.8 in December, indicating that activity in that sector grew. Commercial activity, which includes building offices, shops and factories, was 53.6.

Civil engineering, mostly comprising work on State-funded projects such as roads, schools and hospitals, returned at 43.1, indicating that activity in this area slowed.

Builders were more confident about the future in December than they had been for six months, Ulster Bank said.

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Gateway Retail Park Development

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(before and after)

We are very excited to announce that we have just completed stage 1 works to our existing car park as part of the Phase 2 development at Gateway Retail Park.

Boots signs up for flagship Galway store in Gateway Retail Park

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Boots has become the latest major retailer to sign up at the landmark Gateway Retail Park in Galway.

The pharmacy-led health and beauty retailer has agreed to take a new 700 sq.m (7,500 sq.ft) premises at the scheme.

Boots are understood to be paying a rent in excess of €35 per sq.ft per annum for its new store which is under construction as part of the second phase of the retail park. Boots will be located immediately adjacent to the new branch of Harvey Norman.

Due for delivery in the first quarter of 2020, the second phase at Gateway will comprise an additional 11,148 sq.m (120,000 sq.ft) of retail space offering eight new retailers, three new food and beverage operators and a gym. Current tenants at the Gateway park include Dunnes Stores, Next, New Look, McSharry Pharmacy and B&Q.

Gateway’s asset manager, Paddy O’Connor of Sigma Retail Partners, believes Boots’ decision to locate at the scheme further underpins it as the destination of choice for retailers in Galway.

Darren Peavoy of Bannon who handled the letting on behalf of the landlord said the remaining units at the scheme are all under offer.

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Construction activity boosted in April while companies increase stock

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Construction activity rose sharply in April while purchasing inventory also ratcheted up as companies seek to avoid Brexit-related supply disruptions, according to a survey from Ulster Bank.

The bank’s construction purchasing managers index (PMI) showed that business levels continue to rise underpinned by ongoing increases in the demand for construction work.

But Brexit still weighed on confidence and some companies surveyed noted lower demand while others said they would brought forward purchases to mitigate potential supply issues.

“Nevertheless, the April PMI indicate that construction remains the fast growing major sector of the economy, with growth continuing to outpace that reported in both manufacturing and services where international risks and headwinds, including those linked to Brexit, represent more of a challenge,” said Simon Barry, Ulster Bank’s chief economist in the Republic.

Housing, as opposed to commercial or civil engineering activity, recorded the fastest rise in activity for the fourth successive month during April. Commercial activity also increased, though at the slowest pace in six months while civil engineering activity declined.

Extra staff

Meanwhile, while job creation was quicker than the series average, employment growth eased slightly during April despite the fast rise in new business. “Anecdotal evidence from panellists indicated that extra staff had been hired in order to keep up with customer demand,” the survey said.

On pricing, the rate of input cost inflation slowed to a four-month low although there were reports of greater prices paid for steel, insulation and transport while left cost burdens high.

Overall, Irish construction companies picked up from a 68-month low during April, with just over 40% of those surveyed expecting activity to increase over the coming year. The relative positivity was linked to forecasts of increased sales activity, new capital investments and subsidence of Brexit uncertainty over the next 12 months.

The PMI rose to 56.6 in April, up from 55.9 in March.

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Luas Green line metro upgrade not needed for 20 years, NTA says

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The upgrade of the Luas Green line to a metro service will not be needed “for 20 years or so” the National Transport Authority (NTA) has said.

The NTA has today confirmed the MetroLink line, which had been due to run from Swords to Sandyford, will terminate at Charlemont north of Ranelagh, where it meets the Luas Green line.

Last March, the NTA announced plans for the line which would connect Dublin Airport to the city by rail, with the construction of new track from Swords to Charlemont, and an upgrade of the Luas Green line between Charlemont and Sandyford.

Minister for Transport Shane Ross last month said he would “not countenance” significant disruption to the Luas line and any plan which “requires an unacceptable level of shutdowns” to the Luas service would “not be tolerated”.

The NTA said it will tunnel past the Charlemont stop to allow the conversion of the Luas to metro “to occur at an appropriate point in the future” but the upgrade would not be required “for some time – perhaps twenty years or so”.

The new route will also see a station construction site in Glasnevin moved from lands owned by Na Fianna GAA club on St Mobhi Road to an adjacent training pitch belonging to Home Farm Football Club, following complaints by the GAA which were backed by Mr Varadkar. A tunnel boring machine, due to enter the ground at this site, will be moved to Ballymun.

The NTA today said the Home Farm station would be “more compact” than previously planned which would reduce the construction time from seven years to three years. There will be “no impact” on the Na Fianna pitches it said.

The revised route will also see reduced disruption to traffic in the city centre, the NTA said. The proposed station at St Stephen’s Green East will be moved slightly south and west to avoid the closure of Hume Street during construction However, St Stephen’s Green park itself “will be impacted to a small extent as a result”.

At O’Connell Street the proposed station will be moved to underneath the old Carlton cinema and the vacant plot beside it, where a shopping centre is planned stretching from O’Connell Street to Moore Street. The previous station location in the middle of the street, “would have presented a significant challenge to Luas services, bus services, and vehicular traffic on O’Connell Street” the NTA said.

However, the NTA still plans to go ahead with plans to demolish the College Gate apartment block and Markievicz leisure centre on Townsend Street to facilitate an underground station at Tara Street.

It said it did investigate alternatives, including locating the station under the Hawkins House development site, but “reluctantly concluded” demolishing the block of 70 apartments and the swimming pool, remained “the most feasible option”. It has however, reversed plans to demolish the smaller Court apartment building at Dalcassian Downs in Glasnevin.

The new route will be available for public consultation from today. The NTA expects to make an application to An Bord Pleanála for MetroLink next year, with construction expected to take six to seven years.

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Society of Chartered Surveyors - SCSI Ireland

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