I s s u e N o. 2 2 O C TO B E R 2 0 0 5
C o m m o n A b b re v i a t i o n s
DoELG = Department of the Environment and Local Government; CDG = Concrete Development Group;
CEPMC = Council of European Producers of Materials for Construction; CIF = Construction Industry Federation;
FCI = Forum for the Construction Industry; HSA = Health & Safety Authority;
CIC = Construction Industry Council; NRA = National Roads Authority,
BRAB = Building Regulations Advisory Body; ACEI = Association of Consulting Engineers in Ireland,
CISC = Construction Industry Standards Committee; RIAI = Royal Institute of the Architects of Ireland,
CCC = Concrete Consultative Committee; SRC = Strategic Review of the Construction Industry
IAB = Irish Agrement Board; EC = European Commission
I N T RO D U C T I O N
BMF Update is circulated to BMF members every quarter. Most of the documents referred to are available from the BMF on request.
HOUSING OUTLOOK 2006 The Working Group looking at "Non-recovery of increases on Labour
Austin Hughes, Chief Economist of IIB Bank made a presentation to the and Materials" is the one of most interest to the BMF and its first
BMF Council Lunch on 29th September and forecast a very positive meeting took place on Tuesday 27th September and was attended by
outlook for 2006. He expects demand for housing to remain strong at representatives of the private sector (BMF, CIF, professions) and the
around 80,000 units. The main reasons he gives for differing from public sector (Dept of Finance and representatives of other Departments).
consensus forecasts (typically around the 65,000 level) are migration and A second meeting was held on 14th October
SSIAs. He suggested that the demand from migrants has been Solicitors who had been involved in the drafting of the guidance
underestimated to the order of 7,000 units per annum. He expected that document were also part of the public sector delegation at both meetings.
SSIAs to gearing to result in demand for an additional 4,000 second
homes per annum. SSIA money will also fund a reduction in household At both meetings the private sector outlined its concerns:
size as parents assist children resulting in a further 4,000 units. He
considers both migration demand and SSIAs to be once off corrective I Risk transfer / having to bear the inflation risk
factors that will affect 2006 and 2007 with a drop off in subsequent years. I What justification was there for a 42 month fixed price period
I What justification was there for setting hyperinflation at 80%
In response the public side quoted Government policy on risk transfer,
the used of fixed price contracts in "other jurisdictions", and the lack of a
hyperinflation clause in existing fixed price public contracts. (The private
side disagreed with these points).
Much of the discussion at the meetings revolved around minor points in
the text of proposed document and aspects of the methodology proposed
for cost recovery once hyperinflation was reached.
The public side appeared to take on board some of the practical issues
surrounding these minor points but was immobile on the two key issues -
42 month fixed price period and a hyperinflation clause.
Austin Hughes, Chief Economist IIB Bank with BMF Director, Paul Kelly
More details will follow when the public sector side issue a formal
F I X E D P R I C E C O N T R AC T P RO P O S A L S F O R response to the industry.
P U B L I C P RO C U R E M E N T
The Government has issued proposals (see August Update for more Full details including a series of regular BMF updates on the matter can
details) to introduce fixed price contracts for publically procured be found on the BMF website at:
construction projects, services and materials. The view of the BMF http://www.ibec.ie/sectors/BMF/bmfdoclib4.nsf/wvICS?OpenView&Rest
Council is that these proposals should be opposed. rictToCategory=FCI+-+Public+Procurement+Draft+Contracts
EMISSIONS TRADING Director General and Director of Licencing, expressing these concerns.
A report was issued earlier this month by BOC/ICF, on behalf of Detailed criteria are currently being established by the Agency as to which
Government, for public consultation. It updated emission projections to incidents are to be posted on their website and a formal procedure will
2020, recalculated Ireland s distance to our Kyoto target and suggested be established.
possible sectoral abatement measures. A recommendation on the
allocation to the traded sector was not contained in the report to the
dismay of industry. IBEC will make a submission on the consultation
document and will interested sectoral groupings and individual B M F R E P R E S E N TAT I O N
companies. The public consultation phase will end on November 3rd. A
final report will then be prepared to inform a Government decision.In B U I L D I N G R E G U L AT I O N S A DV I S O RY B O DY
addition the EPA will begin work on the National Allocation Plan for
2008 – 2012 (NAP 2) and define a methodology for allocating allowances BRAB met on 4th October and discussed:
to individual installations. NAP 2 must be submitted to the European
I Part B – Fire with Minister for approval at the moment
Commission by the end of June 2006.
I Part L – implementation in July 2006 but three year deferral on
D E PA RT M E N T O F E N V I RO N M E N T –
A N N UA L R E V I E W A N D O U T L O O K D O C U M E N T
The Review and Outlook prepared by DKM Economic Consultants has
I The European Commission are continuing with their proposals to
been published recently. It is available on the Departments Website(click
revise the Construction Products Directive and are putting a
here). The next BMF Business Bulletin will contain a commentary on the
consultancy study on the matter out to tender.
key points in the document.
I The Commission have also proposed a separate study on the cost of
standardisation and to undertake another study on competitiveness in
E PA P U B L I C N OT I F I C AT I O N P RO C E D U R E S the construction sector.
The EPA is currently posting details on its website of any incident,
requiring investigation, reported to the Agency by a licensed facility. The C O N S T RU C T I O N I N D U S T RY C O U N C I L
EPA implemented this measure without prior consultation with industry.
IBEC is seriously concerned as to the impact of a notification process, I The CIC have met on a number of occasions since the summer to
lacking criteria or a formal procedure, on the reputation and address the fixed price contracts issue. See previous page for
competitiveness of Irish industry. A delegation from IBEC met the more details.
S TAT I S T I C S AT A G L A N C E
C o n s t r u c t i o n E m p l oy m e n t +3.3% annual change in employment between August 2004 and 2005
Building Materials Prices August 2005: No monthly change; 3.2% annual change
The biggest annual changes are accounted for by bituminous emulsions (15.9%);
stone, sand and gravel (8.3%)
H o u s i n g ( H o u s i n g S t a rts based on
Commencement Notices) 54,566 for the first eight months of 2005 – 1.1% lower than the same period in 2004
Housing (Housing Completions
based on ESB connections) 54,394 for the first nine months of 2005 – 0.4% higher than the same period in 2004
A full breakdown of housing starts, completions and registrations can be found here
P a u l Ke l ly, D i re c t o r, B M F – 01-6051621 email@example.com
M a r k M c A u l ey, E xe c u t i ve , B M F – 01-6051652 firstname.lastname@example.org www.ibec.ie/bmf