17 Sep 2019
Irish Economy: Planning permissions jump in Q2 on increased apartment approvals
Planning permissions data released by Ireland’s CSO show that 9,611 dwelling units were approved in Q2 2019, a 42% increase on Q2 2018 (and 28% increase on the previous quarter) which was entirely driven by higher numbers of new apartment approvals.
The number of planning permissions had disappointed recently and was lower y/y in both Q1 2019 and Q4 2018, so this substantial increase is welcome. With the number of new houses approved broadly flat both on a y/y and q/q basis, the increase was attributable to the large rise in the number of new apartments approved. 4,675 apartment units were granted permission in Q2 – the largest outturn since the dying embers of the housing boom of the last decade. Indeed, the 7,267 apartment units granted permission in H1 2019 was close to double the number of apartment unit approvals in the same period of last year.
It is usually more instructive to take a 4QMS view to take account of the “lumpiness” of the planning permissions data, but these data are telling a similar story. 19,092 houses received planning permission in the past four quarters, just 1.5% higher than in the previous four quarters, while the approval of 12,712 apartment units was 72% higher than the comparable period.
The number of housing units granted planning permission in a 12-month period is now above 30,000 for the first time since the period to Q1 2010. The proportion of apartments in Ireland’s housing stock is particularly small by international norms and has contributed to the shortage of rental stock and urban sprawl around Dublin in particular. However, with ongoing strong demand from institutional investors for PRS assets and the introduction of less onerous building standards encouraging apartment construction, the latest data suggest that this may gradually change.
Irish Economy: Another month of bumper goods exports in July
July was another month of bumper exports from Ireland with the value of total good exports surpassing €13bn again – the fourth month in the past nine that this level has been reached (goods exports passed the €13bn mark for the first time just last November).
July’s total represented a 19% increase y/y. While this growth was broad-based – eight of the nine commodity groups posted y/y increases – the pharma sector accounted for the majority of the growth with exports of Chemical and Related Products +20% y/y at €8.0bn. It has been a similar picture in the year to date with total goods exports +11.5% y/y in the year to July, again led by the pharma sector but with good growth in the second and third largest commodity groups, Machinery and Transport Equipment and Food and Live Animals. Goods exports to Britain increased by 5.1% y/y in the year to July, but the relative importance of this market continues to decline with 9.3% of goods exports in the first seven months of the year destined for the British market.
It is encouraging to see the Irish export sector continue to post record numbers given the concerns about slowing growth momentum in the global economy.
UK PM, Boris Johnson headed to Luxembourg yesterday to meet European Commission President Jean Claude Juncker and Prime Minister Xavier Bettel. Mr. Johnson was due to attend an outdoor press conference with Mr. Bettel but due to some boisterous protest scenes and the hosts refusal to hold it indoors, Mr. Johnson was a no-show, leaving Mr. Bettel to eulogise on the mess that is all things Brexit. Mr. Bettel whilst gesturing regularly to the empty lectern to his right was at pains to point out that the British government had failed to put forward any serious proposals for a new deal.
Meanwhile back in Westminster, Boris Johnson’s decision to prorogue parliament will come under some tight scrutiny today as the Supreme Court is set to rule if his actions were unlawful (note this is the first day of three and a final verdict may not be concluded until next week). The appeals come after Scotland’s highest civil court ruled the actions broke the law, while London’s high court said it wasn’t a court matter. Johnson has fallen short of saying he will recall parliament if the courts rule against him, insisting he will wait and see what they have to say before making any moves.
More weak Chinese data
Figures released late on Sunday night for August came in softer than consensus. Industrial production growth fell back to 4.4% (y/y) from 4.8% in July (consensus 5.2%), taking it to a new 17½ year low. Retail sales, which showed signs of buoyancy a month ago, edged down to an annual pace of 7.5% from 7.6% (consensus 7.9%). Fixed investment slipped back to 5.5% (y/y) from 5.7%. Despite the subdued tone of the figures, the always-upbeat Chinese National Bureau of Statistics insisted that the economy was still on track to expand at its target rate of 6%-6.5% over 2019.
14.15 US Industrial Production