A Week of Highs & Lows

It has been another busy week for the Government and for the industry. Our new Housing Minister has resisted early pressure from the opposition to ban co-living (so far). Minister Darragh O’Brien was speaking at the opening of new social housing and he reiterated that while he, personally, is not a fan of this type of housing, he believes that the market will decide. This is, of course, quite different to the approach he advocated while he was in opposition…

Meanwhile in Cork, City Councillors have backed a motion of no confidence in An Bord Pleanála after what has been described as “an affront to local democracy”. Independent Councillor Paudie Dineen who tabled this motion of no confidence also called for the current board of An Bord Pleanála to be disbanded.  He is requesting that a public inquiry be carried out into the decision making of the board on all large scale developments over the past 18 months. It is not clear whether this request refers to Cork City decisions only. This latest move against by An Bord Pleanála comes after the Board overturned an unsuccessful material contravention voted on by local councillors in relation to a controversial housing proposal in the Blackrock area that would have enabled the construction of 30 new apartments. Councillors in Cork City are not the first to feel disempowered by the non-local approach taken by ABP, however, some might say that this non-local approach adds an important layer of objectivity to urban planning.  One councillor expressed the view that many people in this country have no confidence in the planning process and sought the resignation of the people on the Board who made this particular decision.

On the construction front, the latest Ulster Bank construction index confirmed that activity levels have rebounded nicely since sites reopened back in May. The index posted 51.9 in June and, as mentioned here before, any figure above the 50 mark indicates growth.  The residential index jumped from 19.9 in May 2020, which is the first positive month for growth in three months. Significantly, the Irish Times reported that despite activity returning to growth, many firms continued to lower their staffing levels amid relatively low workloads. Employment levels are continuing to fall as a result of the contraction of new business opportunities, however, Simon Barry, chief economist at Ulster Bank, predicted that expansion will likely return as industry confidence grows.

Against this backdrop, it is significant that several unions are threatening strike action, with workers calling for “all out war”, after the High Court ruling that Sectoral Employment Orders (SEOs) in the construction industry are unconstitutional. It is worth watching the Irish Times video for a deeper understanding about this issue.

If poorly handled, this latest crisis for the industry has the potential to hurt delivery and output levels for the year, and these levels are already suffering from the ongoing impact of the pandemic. We will keep a watching brief on this as it unfolds.

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group