The CSO has also released today the Q2 2010 Production in Building and Construction Index. It shows that the woes of the construction industry are continuing in 2010, with the volume of production decreasing by 32.8% between Q2 2009 and Q2 2010, and the value of production decreasing by 31.8% in the same period. Declines in value were 41% in residential building work, 36% for non-residential building work, and 21% in civil engineering between Q2 2009 and Q2010.
The residential market has been particularly badly hit, with the value of production index now just 12.8, and the volume of production index at 11.3 (against a 2005 base of 100), indicating that house building has largely contracted to one-off properties, with few larger developments progressing.
To put things in context, I’ve plotted the change over time from 2000-2010 using the CSO data (available from here). In both value and volume there was steady growth in the first half of the decade, then a short period of slowdown, then rapid decline. The graphs show little sign of slow down in the decline. The all buildings and construction value index has declined70.1% from Q2 2006, with the residential value index declining by a massive 87.8%. The non-residential value index peaked slightly later and has declined by 48.6% from Q2 2008, and the civil engineering value index has declined by 33.1% from Q2 2008.
The CSO data also allows a European comparison. Ireland had the second largest annual % decline between Q2 2009 and Q2 2010 at -33.1% only exceeded by Latvia at -35.3%. It was trailed by Denmark at -23.2%, Bulgaria at -19.5% and Greece at -18.3%. Only six countries had growth over the same period, including Finland at 17.8%, UK at 10.1%, Sweden at 6% and Germany at 4%.
Given oversupply issues in both residential and office/retail sectors, building in these sectors has declined rapidly in value and volume as a market correction takes place and the wider economy seeks to recover. And whilst civil engineering has managed to hold-up through capital projects, it too is now starting to decrease as the government cuts back on such projects. In the short term, at least, given the fiscal crisis it is difficult to see any major turn around in present trends and the construction industry is likely to continue to suffer further job losses and companies going bust.