The seasonally adjusted index, which is designed to track changes in total construction activity, was 54.9 in May, down from 56.6 in April. The result signalled the slowest expansion of Irish construction activity for four months, although the latest increase was marked and much faster than the long-run series average. Irish construction activity has increased on a monthly basis since September 2013.
Simon Barry, chief economist Republic of Ireland at Ulster Bank, said: “Irish construction firms continued to experience solid, though slower, growth in May according to the latest results of the Ulster Bank Construction PMI survey. The headline PMI eased to a four-month low last month, but at 54.9 it remains well above the 50 breakeven level and indicates that firms continue to report solid gains in activity. Very encouragingly, the residential sector remains a particular bright spot with Housing activity continuing to expand sharply last month. Commercial activity also very much remains in expansion mode, but the Commercial PMI has now fallen for three months in a row, with the May reading marking the slowest pace of growth in nearly six years.
“New business and employment levels continued to rise at healthy rates in May, albeit in line with overall trends, both indices eased last month. This was particularly evident in the case of employment, with the rate of job creation dropping to its slowest pace in over four years. However, this is best seen as a retreat from very elevated readings in recent months. Survey respondents remain optimistic about the sector’s prospects over the year ahead, with expectations of stronger customer demand cited as an important source of support”.
The housing sub-category recorded the fastest rise in activity of the three monitored sub-sectors for the fifth month running during May. Commercial activity also increased, albeit at the slowest pace since August 2013. Meanwhile, civil engineering activity declined for the ninth consecutive month, with the rate of contraction quickening slightly from April.
Employment across the Irish construction sector increased for the 69th successive month during May. Despite being solid, the rate of job creation eased from April to the slowest since March 2015. The expansion in workforce numbers was attributed to ongoing increase in construction activity and expectations of higher new business later this year.