Activity and new orders also increased at faster rates in October than seen in September.
The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – increased for the second successive month to reach 62.3 in October, up from 58.7 in September. This represented a sharp monthly rise in total construction activity, and the fastest in seven months. Construction output has increased continuously since September 2013.
Simon Barry, chief economist Republic of Ireland at Ulster Bank, said: “The latest results of the Ulster Bank Construction PMI survey show another sharp increase in Irish construction activity, with the pace of expansion accelerating to a seven-month high in October.
“Importantly, construction firms are continuing to benefit from robust increases in new business levels, with the New Orders index rising to its highest level since February following a fifth consecutive monthly acceleration in October. Firms continue to report a strengthening in client demand amid a general improvement in economic conditions as an important contributor to the ongoing uplift in new business volumes. In turn, the healthy expansion of new orders continues to underpin increased demand for construction workers. The Employment index rose sharply last month, with the pace of hiring accelerating to its fastest in eight months as almost one-third of firms noted a rise in employment.
For the sixth successive month, the commercial construction category was the best performer in October as the rate of expansion quickened to a three-month high. Activity on housing projects also rose at a sharp and accelerated pace during the month. Meanwhile, civil engineering activity was unchanged, after having risen in September.
Anecdotal evidence suggested that a general improvement in economic conditions and rising new orders had contributed to the expansion of total activity. The rate of new order growth was substantial, having quickened for the fifth consecutive month to the strongest since February.
Business sentiment ticked up in October and remained strongly positive as approximately two-thirds of respondents predicted an increase in activity over the next 12 months. Among the factors supporting optimism were predictions of improving market conditions and a good pipeline of work.