Construction shindig hot on heels of housing-themed budget
This week in business: Paschal O’Donohoe’s balancing act; CIF conference
An additional 112,000 workers will be needed over the next four years to deliver the Government’s ambition of 35,000 annual housing units. Photograph: Alan Betson
Indicators: Irish construction PMI (Sep); German industrial production (Aug).
Results: Givaudan, Marston’s.
Indicators: UK construction output (Aug), manufacturing and industrial production (Aug); German imports and exports (Aug); US economic optimism (Oct).
Although it is Minister for Finance Paschal Donohoe’s debut on the highest stage of State finance, Budget 2018 is shaping up to be a dull affair.
Expectations have been tamed and demands subdued as the dreaded “fiscal space” has been discussed and debated in the most guarded tones. The Minister has about €300 million for tax and spending measures, unless he raises taxes or finds some loose change down the back of the couch.
“With only three months left in the year, overall tax receipts are in line with forecasts while expenditure remains within expectations,” Donohoe said last week.
“This means that we are currently on track to meet our fiscal targets for 2017, providing a stable platform for Budget 2018 and in line with plans to balance the books next year.”
It was a sober assessment of sensible things, following the publication of exchequer returns that showed the tax take for the first nine months of the year to be about €212 million short of expectation.
Income tax was the biggest disappointment (€188 million below the anticipated figure) although mandarins believe this gap will close by the end of the year. VAT, too, came up short.
About €170 million of the sum available in this year’s budget is already committed. Elsewhere, pre-announcement speculation sees some income tax cuts, an increase in the State pension, a drop in Dirt savings tax and possibly a little something for entrepreneurs.
Results: BlackRock, Delta Airlines.
Indicators: Irish agricultural price indices (Aug); CSO household travel survey (Q2); new vehicle registrations (Sep); US mortgage applications and rates (Oct).
Results: Südzucker, Citigroup, Domino’s Pizza, JP Morgan Chase.
Indicators: Irish inflation (Sep); consumer price index (Sep); residential property prices (Aug); Euro zone industrial production (Aug); US PPI (Sep).
Meetings: Construction Industry Federation (CIF) Annual Conference (Croke Park, Dublin 3).
In the run-up to its annual conference on Thursday, the Construction Industry Federation (CIF) notes it now faces “more fundamental” change than at any time in the last half-century.
Construction and real estate, whether during the investment fever of boom times or the housing vacuum of its aftermath, doggedly refuses to leave the centre stage of Irish socio-economic debate.
Figures last month revealed planning permissions have increased by 42 per cent in the year to June.
However, in the second quarter houses have accounted for the vast majority (82 per cent) with a growth rate up by 55 per cent on 2016. By comparison, Q2 saw permission for just 823 apartments, a rise of 2.7 per cent on 2016, but down 8 per cent on the first quarter.
How Ireland addresses its troubled approach to home building remains a critical issue. Developers argue apartments are too financially risky. A recent study by the Department of Housing found it was not viable for builders to construct “affordable apartments” priced between €240,000 and €320,000. The CIF has said parking spaces alone for apartment blocks can cost as much as €100,000 apiece.
“The industry in Ireland is still in recovery and despite several initiatives over the last few years, output remains below where it should be,” it said in a note on its conference.
An additional 112,000 workers will be required over the next four years to deliver the Government’s ambition of 35,000 annual housing units and over €45 billion in public capital investment up to 2021, it said.
“How can government and the industry work together to deliver these ambitious targets optimally and sustainably?”
The debate goes on.
Indicators: CSO trade statistics (Jul); German inflation (Sep); US inflation (Sep), retail sales (Sep).