Thursday 18 January 2018

Construction sector growing faster in Greece than Ireland

Activity in the construction sector has now increased in each month over the past year, the first time it has done so since the start of the recession.
Activity in the construction sector has now increased in each month over the past year, the first time it has done so since the start of the recession.
Donal O'Donovan

Donal O'Donovan

The construction sector is growing faster in crisis-hit Greece and in Spain than it is here, despite higher overall growth in the Irish economy, according to new EU data.

Construction output right across the European Union remains well below pre-crash levels, with little sign of a recovery.

In December 2014 production in construction fell by 3.5pc compared to the same time a year earlier, in the European Union as a whole, according to figures from Eurostat, the EU statistics agency.

At EU level, building of houses and commercial properties declined in 2014 but civil engineering showed some signs of recovery - up 3.8pc compared to the previous year in the EU 28 and rising by a more modest 1.6pc in the euro area.

In Ireland, the most recent figures for the third quarter of 2014 showed a 10pc increase in construction as the sector begins to emerge from half a decade of bust.

However, the pace of the Irish building recovery in the third quarter was overshadowed by Greece - which racked up a 61.4pc increase in output over the same period, and Spain where the sector grew by 12.4pc.

In the previous three months construction output increased by 10.4pc here, compared to 22.9pc in Greece and 33.1pc in Spain - which also suffered deep and sustained property crashes.

Nine months after the launch of the Government's Construction 2020 strategy to revive the sector, the lack of house building is still a major factor holding back the sector here, a spokesman for the Construction Federation Industry (CFI).

There were 11,016 housing unit completions here last year, up 30pc compared to 2013 but less than half the estimated national requirement.

In many cases the 2014 completions were of buildings begun during the boom.

Barriers include access to finance for builders, but also the cost of construction, he said.

"The Government needs to deal with the cost of building including uneconomic levies in some local authority areas and move ahead with implementation of the construction contracts act," the spokesman added.

Figures earlier this month showed that the Irish economy is the fastest growing in the euro area, and among the fastest growing in the EU.

However, the latest Eurostat data shows the recovery in the construction sector continues to lag behind peers, even though the growth is off a low base of activity in 2013.

Representatives of the Department of Finance, the CIF, financiers and developers are due to meet next week for talks aimed at identifying and addressing factors dampening activity in the sector.

Irish Independent

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