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Wed June 16 2021

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Irish construction activity continues to rise

12 Apr 16 There was continued strong growth in construction activity in Ireland in March, although the rate of expansion eased from February’s high.

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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.

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“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.

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