By Eamon Quinn
A monthly survey tracking the construction industry showed a sharp rise in house building as the CSO prepares to publish figures this week which may reveal the true picture of the housing crisis facing the State.
Along with commercial activity that includes offices, shops, and industrial space, housing activity boosted output by a “substantial” amount in May, according to the Ulster Bank Construction index, which is based on surveying purchasing managers in the industry.
With a reading of over 65, housing activity accelerated in a survey where any reading over 50 means expansion. But the survey showed that after growing this year that civil engineering--the third leg of construction, contracted last month. Surveys of purchasing managers shine some light on overall conditions but give no insight into the number of homes under construction or nearing completion.
The number of houses being built is mired in controversy. Critics such as Goodbody chief economist Dermot O’Leary have long said that official figures on new home completions based on ESB electricity connections wildly overstate the number of houses coming on stream. His latest report last month said that based on building energy (BER) rating certificates that only up to 16,000 new homes will be built this year, far short of the 35,000 annual target he estimates will be required to start meeting demand. New home builds are running at “incredibly low levels”, with significant implications for Government policies, he has warned.
The CSO later this week launches the first of its new quarterly reports that will try and give a definitive picture of the number of new homes built in the last seven years and on the overall housing stock.
The Ulster Bank survey suggests that the expansion of the commercial and housing construction may come about after the sharp improvement last month in the harsh spring weather.
“And survey respondents remained strongly optimistic about the year ahead with a strong pipeline of new activity and improving economic conditions cited as important sources of support,” said Simon Barry, Ulster Bank’s chief economist in the Republic.