The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – rose to 60.5 in February, up from 54.6 at the start of 2019, signalling a sharp expansion. Moreover, the rate of growth quickened to a seven-month high. Construction activity in Ireland has now increased on a monthly basis since September 2013.
Simon Barry, chief economist Republic of Ireland at Ulster Bank, said: “Growth in Irish construction activity accelerated markedly in February according to the latest results of the Ulster Bank Construction PMI survey. The rate of overall expansion picked up to a seven-month high last month, as the headline index rose to 60.5 from 54.6 in January leaving it significantly above the 50 no-change benchmark. The strengthening performance in February was driven by particularly rapid activity growth in residential construction which was the strongest-performing category last month. The Housing PMI picked up to its highest level since May of last year pointing to a welcome strong start to 2019 for housing construction. Commercial activity also recorded a marked acceleration with its PMI also reaching a nine-month high.
“Encouragingly, respondents reported a marked pick-up in new business, with the new orders index rising to a very elevated reading of 60.2 in February, marking an eight-month high. In turn, strong activity and order flows continue to underpin robust demand for construction workers, with the pace of job creation matching a seven-month high in February. Sentiment among firms about the sector’s prospects over the coming twelve months remained solidly positive at levels well above its historic average as firms continue to cite the supportive influence of solid trends in new orders and the ongoing improvement in economic conditions.
“However, confidence levels did slip back last month reflecting some concern about downside risks to customer demand – perhaps an indication that elevated levels of economic uncertainty are weighing on firm’s perceptions of the outlook.”