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Tue October 23 2018

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Expansion in Irish construction accelerates

15 May Irish construction activity rose at a marked rate in April, with the rate of expansion accelerating to a three-month high.

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Greater output was also reflected in faster growth in new orders, purchasing and employment, though rises in demand fed through to increased pressure on supply chains and a marked increase in input prices. Confidence at construction firms was robust overall but dipped to a three-month low.

The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – rose from 57.5 in March to 60.7 in April. The latest reading signalled a sharp expansion across the Irish construction sector, the second-fastest since May 2017. The overall upturn was driven by an increase in new projects following poor weather in the first few months of the year.

Simon Barry, chief economist Republic of Ireland at Ulster Bank, said: “There was a very sharp acceleration in commercial activity which took the Commercial PMI to its highest level since last May, in the process leaving commercial as the strongest performing activity category last month. But the improvement was broadly-based, with the pace of growth in housing activity also picking up to an eleven-month high, while civil engineering recorded a fifth consecutive month of expansion, albeit at a somewhat slower pace in April.

“Respondents also reported a marked pick-up in new business flows reflecting stronger client demand, with the new orders index rising to a very elevated reading - and nine-month high - of 61.6 in April. And the buoyancy in activity and new orders continues to underpin very strong and accelerated rates of job creation with the employment index picking up last month to its highest level since early 2017.”

Total activity growth was supported by sharper rises in housing and commercial activity, each of which reported marked increases that were the fastest in 11 months. Meanwhile, growth in civil engineering activity softened and was the weakest of the three monitored sub-sectors.

Similarly, the amount of new orders received increased at a marked pace in April. Greater client demand and wider success in tender applications were largely linked to the latest rise in new business. Moreover, the rate of expansion was the quickest in nine months.

Construction firms increased their workforce numbers at a marked pace in April. Greater workloads drove the fastest rise in employment since February 2017.

MPU

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