In quarter 1 of 2011 Ireland’s construction output continued to fall. Figure 1 shows Ireland’s construction output against the EU27, our closest neighbour the UK and Germany. It is clear to see that Ireland’s construction output has been hit much harder than the EU average and our neighbour the UK. Ireland’s output is only 23% of what it was in 2005 (which was not even the peak of the construction bubble). While the UK suffered a decline in construction over recent months it has increased to 2005 levels and more or less maintained these levels, with a slight fall in Q1 2011. The EU average in also holding steady at about 90% of the output of 2005. Slight seasonal fluctuations can be observed in the trend but that path is remaining fairly stable. Germany is beating the downward and constant trend, with increases in construction output. It is now producing at about 20% above 2005 levels.
These figures highlight the continuing dismal state of the Irish construction industry. And worryingly, as quarter on quarter declines are still being observed, we appear to not have bottomed out yet.
Justin Doran is a Lecturer in Economics, in the Department of Economics, University College Cork, Ireland.