Residential construction in Galway down by 70% over the past 12 months

There has been a dramatic drop in the level of residential construction work across Galway.

According to new research in the ‘National Housing Construction Index’, activity in the city and county during the first two months of 2015 was “sluggish”.

The report – compiled by researchers at Link2Plans.com – found that when compared to the same period last year, the number of project commencements was down by almost 70%, while planning applications are down 13%.

The index measures construction activity through planning applications and Commencement Notices submitted to the City and County Councils. Commencement Notices are submitted when construction work is about to begin on a permitted project.

The figures show that in January and February, there 50 Commencement Notices submitted to the local authorities in Galway – that is down 69% on the 159 recorded for the same period last year, and almost on a par with the 49 recorded for the same two months in 2012 and 2013.

The overall national decrease was 62%.

However, Danny O’Shea, Managing Director with Link2Plans explained the 2014 figures were skewed by the new Building Regulations introduced in March of that year.

“2014 was an exceptional year due to regulatory changes. The introduction of changes to the building regulations in March 2014 caused an unprecedented surge in commencements, which was akin a one-off stimulus boost.

“In fact, commencements for the first two months of the 2015 are up over 3% on the same period in 2013, which probably gives a more accurate picture of the steady but slow growth in the sector.

“As building applicants rushed to lodge their commencements before the changes to the regulations, it created an anomaly in the market with an increase in commencements of 132% for the first quarter of 2014. These were exceptional gains and ones which we don’t anticipate will be repeated in the medium term,” he said.

“The fall in project commencements nationally reflects the situation in Galway, which also saw commencements fall sharply.

“The beginning of 2015 has seen growth in the residential construction sector in Galway remain sluggish,” said Mr O’Shea.

Meanwhile, planning applications were down 13% to 79 (from 91) on last year, lacking significantly behind an overall national increase of 9%.