Overall construction activity was flat in July
The Government’s target of delivering 33,450 new homes this year is in jeopardy even as the Taoiseach and his officials prepare to officially hike the target to 50,000.
The latest Construction PMI data tracking the sector shows house-building activity increased for the fifth consecutive month in July, and at a solid pace that was the fastest since April. However, despite a flurry of construction starts in the early part of this year boosted by the waiving of development levies and water-connection fees, the pipeline of units coming to completion appears to be slowing down, the research produced by BNP Paribas Real Estate Ireland shows.
The latest PMI tracker shows overall construction activity flat in July, reflecting the slowdown that has taken place in the commercial and retail segments in particular. House building remains the bright spot, helping drive the sharpest rise in new orders since February 2022.
The rate of job creation eased to an eight-month low in July but remains robust.
However, despite pressure to boost supply, the housing-completions target for 2024 remains in jeopardy due to a depleted pipeline of schemes under development coming into this year, and slow first-half completions, according to BNP Paribas chief economist John McCartney.
The number of new homes being completed in the first half of this year was down more than 8pc versus the same period in 2023, he said. That reflects a mix of factors including a change in the mix of schemes being completed in favour of houses over apartments, which tend to be faster to build but feature fewer units per development.
“This means 20,700 units need to be delivered in the second half for the Government’s target of 33,450 completions to be met – an 11pc increase over the second half of 2023. Given that the number of units under construction in Dublin was down 13pc year-on-year as we entered 2024, this would appear to be quite challenging,” Mr McCartney said.
It suggests the Government will fall short of meeting a target senior policymakers have already deemed inadequate.
However, housing activity increased for the fifth consecutive month and at the fastest since April, which bodes better for completions in 2025.
Meanwhile, commercial activity was broadly unchanged following a sharp reduction in June.
