Friday 19 October 2018

Architecture and engineering services lag 13pc behind 2007 peak despite spending boom

Professional and technical services are the exception to all other sub-sectors
Professional and technical services are the exception to all other sub-sectors
Louise Kelly

Louise Kelly

Professional services such as architecture and engineering are still lagging behind their 2007 peak despite exceptional rebound in consumer spending.

According to the latest Consumer Market Monitor, the services index was up by 15pc at the end of 2017 over its record high a decade previously.

But professional and technical services are the exception to all other sub-sectors, still 13pc lower than the last pre-crash peak.

Professor Mary Lambkin of UCD Michael Smurfit Graduate Business School, author of the report, said that this sub-sector showed the most extreme peak and trough cycle.

"In particular, architecture and engineering firms, which were inextricably tied to the fortunes of construction, suffered significantly in the economic downturn," she said.

The report also found that sales of residential properties grew in 2017 by 7pc to 51,688, the highest level since the recession.

An increase in the number of new homes being built was found, 19,000 in 2017 to increase to 21,000 this year.

"In spite of an estimated 19,000 new homes built in Ireland last year, house building in Ireland is still among the lowest in Europe, and this has impacted the growth of this sub-sector," said Professor Lambkin.

The services sector recovered more quickly from the financial downturn than the retail sector, growing steadily from 2011 onwards.

In the past year, and for the first quarter of 2018, most service sub-sectors have recorded growth: Professional, Scientific and Technical (up 11.9pc), Administrative Support (up 8.5pc), Wholesale and Retail (up 5.2pc), Accommodation and Food Service (up 3.2pc), Transportation and Storage (up 1.6pc) and Information and Communication (up 1.9pc). 

"All of the economic fundamentals in the Irish economy remain strong with continuing growth in employment and modest wage increases being the primary drivers of growth," said Tom Trainor, Chief Executive of the Marketing Institute of Ireland.

"The services sector, which covers a range of businesses from banks to hotels, is responsible for the employment of hundreds of thousands of people in Ireland and it is very encouraging to see strong growth within the sector, up 15pc from the peak in 2007."

The Consumer Market Monitor (CMM), is published by the Marketing Institute of Ireland and UCD Michael Smurfit Graduate Business School.

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