Growth in Irish construction quickens
May 16, 2019 – April saw further expansion in Irish construction activity, according to the latest Ulster Bank Construction Purchasing Managers’ Index (PMI).
The index, which is designed to track changes in total construction activity, rose to 56.6 in April from the March figure of 55.9. Moreover, April marked the sixty-eighth consecutive month of greater construction activity in Ireland.
Ulster Bank chief economist Republic of Ireland Simon Barry said: “Irish construction firms have made a strong start to the second quarter of the year, according to the April results of the Ulster Bank Construction PMI. The headline PMI index rose modestly last month, consistent with an acceleration in the pace of overall activity growth from what was already a very solid pace in March. Furthermore, housing activity was again (and for the fourth month in a row) the strongest performing sub-sector as growth in residential activity continues to show welcome signs of rapid expansion, at similar rates to those reported in 2018.”
Commercial activity also increased solidly, though at the slowest pace in six months. For the eighth successive month, civil engineering activity declined, though at a softer pace than in March.
“The latest results also point to a reacceleration in new orders growth, with new business levels continuing to rise sharply, underpinned by ongoing increases in the demand for construction work,” said Barry. “That said, negative Brexit uncertainty effects on customers were identified by some firms who noted lower demand in the April survey. Moreover, Brexit was also cited as a factor behind the sharpest rise in purchasing activity since last June, as some firms stated that they had brought forward input purchases in order to mitigate any potential supply issues resulting from Brexit.”
Barry added that the April PMIs indicate that construction remains the fastest-growing major sector of the economy. Growth continues to outpace that reported in both manufacturing and services where international risks and headwinds, including those linked to Brexit, represent more of a challenge, he said.
In contrast to the faster rise in new business, employment growth in the Irish construction industry eased slightly during April. Despite this, the rate of job creation was sharp and quicker than the long-run series average. Anecdotal evidence from panellists indicated that extra staff had been hired in order to keep up with customer demand.