Growth in new orders remained sharp and companies increased both their purchasing activity and staffing levels again. Meanwhile, the rate of input cost inflation eased to the slowest in 21 months.
The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – posted 62.3 in March, remaining well above the 50.0 no-change mark, despite dropping from the reading of 68.8 seen in February.
Construction activity has now increased in each of the past 31 months, with rising numbers of enquiries reported by respondents in March.
Simon Barry, chief economist Republic of Ireland at Ulster Bank, said: “The latest results of the Ulster Bank Construction PMI survey show that activity in Irish construction continued to expand at a rapid rate in March, albeit that the pace of growth eased somewhat from the record levels recorded in February. Some pull -back from last month’s all-time survey high is not particularly surprising, and at 62.3, the headline PMI index continues to point to very strong expansion. It’s a similar story at the level of each of the major sub-sectors, with growth easing but remaining robust in the commercial, housing and civil engineering areas.
“Firms continue to report solid flows of new business. In turn, greater availability of tender opportunities continues to underpin increases in staffing levels which have been on the rise for over two and a half years now. And firms remain solidly optimis tic that activity will increase further over the coming year. Over 60% of firms anticipate further improvement over the next twelve months, partly reflecting positive expectations regarding the outlook for the wider Irish economy. ”
Subcontractor usage continued to expand, albeit to a lesser extent than in the previous month. The rate of decline in subcontractor availability also eased, but remained sharp. The rates charged by subcontractors increased markedly, and at a faster pace than in February.
Suppliers’ delivery times continued to lengthen amid signs of growing capacity pressures on vendors.
Construction firms remained strongly optimistic that activity will rise further over the coming year, despite sentiment easing to a five-month low. Around 62% of respondents predicted a rise in activity over the next 12 months, linked to positive expectations regarding economic conditions.