CIOB responds to Quarter 1 2020 statistics on production in building and construction in Ireland

The Production in Building and Construction Index, a short-term measure of activity in the sector by volume and by value, was released on Friday (6 June) by the Central Statistics Office, Ireland. This release covers the 1^st Quarter of 2020 (Q1) and shows a healthy construction sector in Ireland, with an increase in volume both by quarter (4.7%) and year on year (14.9%). The sector also experienced significant increases in value, with 5.1% quarterly and 15.4% annual growth.

Due to restrictions introduced by the Government relating to COVID-19, the construction industry shut down on 28 March  resulting in two lost working days for Q1. However, the full impact of the shutdown will not become become evident until the Q2 stats are released.

In Q1 2020, Civil Engineering showed the largest increase in volume with a 11.7% quarterly increase. While residential building continued to contribute the largest share of volume growth in the sector, its rate of growth fell significantly from 11.3% in Q4 2019 to 5.6% in Q1 2020. Non-residential building continued to grow, showing a 2.6% quarterly increase, although this is down from a growth rate of 8.5% in Q4 2019. Quarterly trends are, however, notoriously volatile.

On an annual basis the building and construction’s on-going healthy growth is being driven by residential building, which increased by a remarkable 29.9% in Q1 2020 compared to Q1 2019. Non-residential building also saw solid growth with a 12.9% annual increase, and civil engineering activity increased by 8.9%

This solid growth on the cusp of the lockdown is encouraging and shows that the sector entered lockdown in a strong position. With construction sites reopening on 18 May, this recent healthy growth will hopefully provide a basis for a quick recovery, as a strong construction sector has been a key driver of Ireland’s economic resurgence in recent years.

Caroline Gumble, Chief Executive of the CIOB, said: 

“These figures are encouraging and show that - thanks to the hard work of CIOB members and stakeholders across the sector – the construction sector entered the lockdown in a strong position. Ireland was one of the only construction industry shutdowns globally. While this will have an immediate negative impact on the growth of the sector, it has also given pause for thought and provided the industry with a chance to modernise. This will involve addressing long term sector specific challenges such as productivity, but also the sector’s role in addressing wider societal goals such as regional rebalancing, and climate change. We are already seeing a lot of repurposing work happening in towns and cities to make them more pedestrian, cycle, and social distancing friendly. Allied with the strong growth construction entered the lockdown with, these are the kind of opportunities that will see the sector thrive in the long term.”