CSO figures show large fall in Construction employment!

[kerrynorth]

CSO figures just released show that Construction employment fell steadily in the 2nd half of 2006 from an index of 113.5 to 104.5 (Jan 2000 is the 100 base figure) or an approx. 8% fall in Construction employment. This may mean that there may have been as many as 20,000 less employed in construction at the begining of the year than in July 2006. This may go some of the way to explainig the hole in the exchequer accounts that I raised in an earlier thread.

The fall in employment was gradual throughout the 2nd half of the year. I think rkeane said he has a construction firm maybe he could tell us if this trend is continuing into the new year?

[Salthill]

ANd the world didn't fall apart! Tax revenues held up, unemployment figures stayed down!

Could it be that the prophets of doom are being proven wrong?

[NeilW]

I doubt it. Wasnt the problem you raised essentially that Jan 2007 receipts were less than Jan 2006 receipts? These figures show that employment in the construction industry was HIGHER in December 2006 than December 2005. Therefore trends in the construction industry can not explain the phenomenon you were interested in.

Anyway isnt there always a marked seasonality to construction jobs with July numbers always quite a bit higher than December?

[kerrynorth]

I doubt it. Wasnt the problem you raised essentially that Jan 2007 receipts were less than Jan 2006 receipts? These figures show that employment in the construction industry was HIGHER in December 2006 than December 2005. Therefore trends in the construction industry can not explain the phenomenon you were interested in.

Anyway isnt there always a marked seasonality to construction jobs with July numbers always quite a bit higher than December?

Yes there is a degree of seasonality in the figures. However, if you look at previous years they have varied 2-3 pts between mid year and years end whereas the variation in 2006 was 9pts!. At 104.5 the index is showing the slowdown in housing starts from the dizzying heights of last year.

On the tax receipts the point I was raising was that the Dept. of Finance were 13% off on the downside in their projections for a tax head that is the most easist to be accurate on, Income Tax. The fact that the receipts were also less than January 2006 in absolute terms was just to illustrate the point.

The fact that construction employment fell so far in the latter half of 2006 may have taken the Dept. by surprise and may have to some extent contributed to their overshooting of Income Tax revenue. That is the point that I am making.

[NeilW]

Yes there is a degree of seasonality in the figures. However, if you look at previous years they have varied 2-3 pts between mid year and years end whereas the variation in 2006 was 9pts!.

Er - no!

Yes in 2006 it was 9pts but:
- in 2005 it was 8pts
- in 2004 it was 8.7pts
- in 2003 it was 9pts.

(Taking July - minus December in each year). Where are you getting you 2-3pts figures?!

On the tax receipts the point I was raising was that the Dept. of Finance were 13% off on the downside in their projections for a tax head that is the most easist to be accurate on, Income Tax.

Income tax may be the easiest (major) tax to forecast accurately but that doesnt mean it is easy to forecast accurately. Especially on a month basis. There may be something to the January figures but equally it may just be a timing issue. (I lean towards timing myself - it is the most likely explanation in the absence of other indications that the economy has collapsed.) Either way it has nothing to do with construction trends.

The fact that construction employment fell so far in the latter half of 2006 may have taken the Dept. by surprise and may have to some extent contributed to their overshooting of Income Tax revenue. That is the point that I am making.

Two points on this - (1) why would it have taken them by surprise when it was so similar to the changes in every other year and (2) even if it did construction is but one sector which could not go very far in explaining the overall receipts figures.

[kerrynorth]

Yes there is a degree of seasonality in the figures. However, if you look at previous years they have varied 2-3 pts between mid year and years end whereas the variation in 2006 was 9pts!.

Er - no!

Yes in 2006 it was 9pts but:
- in 2005 it was 8pts
- in 2004 it was 8.7pts
- in 2003 it was 9pts.

(Taking July - minus December in each year). Where are you getting you 2-3pts figures?!

Yes slight error on my part. I was looking at the year average figure at the bottom of the table rather than the December figure. Sorry!

[Clon]

Again not much can be read into those figures. By kerrynorths logic Jan 2002 and 2003 should have been precursors to a crash because employment figures were lower than the equivalent month the year before. Their was a 5 point shoot up in Jan '05 from '04 and '06 is just ahead of '05, and December '06 is 2 points ahead of Dec '05. Not much could be read into any of that data, unless you really really want to :wink:

[Jim84]

The Ulster Bank Construction Purchasing Managers' Index shows that the activity the sector increased by 50%

[feargach]

I can see how jobs lost in late 2006 would have a delayed impact on 2007 receipts.

Even if re-employed fairly promptly, they'd get a higher credit for 07 and pay less tax.