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News » International » Strong growth continues in Irish construction sector » published 11 Apr 2017

Strong growth continues in Irish construction sector

Activity in Ireland’s construction sector has risen at the fastest pace in five months.

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Rates of expansion remained strong and the growth in new orders was sharp in March, though marginally weaker than in February.

The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – rose for the second month running to 60.8 in March from 57.9 in February.

The sharp monthly increase in total construction activity was the most marked since last October.

Simon Barry, chief economist Republic of Ireland at Ulster Bank, said: “There was a very sharp acceleration in commercial activity which took the Commercial PMI to its highest level since last October, in the process leaving commercial as the strongest performing activity category last month. Housing activity continues to expand at a very rapid rate, albeit that the pace of growth in residential activity eased modestly in March. Civil engineering remained an area of weakness, however, with respondents reporting a fifth consecutive decline in activity.

“Other details from the survey also highlight the strength of the ongoing expansion in activity. Strong demand for the services of construction firms was very much evident in further substantial increases in new orders, employment and input buying last month. And respondents continue to judge the sector’s outlook to be very favourable, with improving economic conditions, strengthening client demand and plans for business expansion cited as important sources of support. Indeed, confidence about future activity prospects edged higher in March with more than 57% of respondents anticipating a rise in their activity levels over the coming twelve months.”

With new orders expanding, constructors increased their purchasing activity at the second-fastest pace in the survey’s history, only marginally behind November 2004’s record.

With new projects getting under way, companies increased their staffing levels accordingly. Although easing to the slowest since September last year, the rate of job creation was substantial.

Average vendor performance also declined during March, with the solid lengthening of lead times broadly in line with that seen in February. Panellists indicated that stock shortages at suppliers had been the cause of delivery delays.

Input prices rose sharply again, with the rate of inflation accelerating from the previous month.

Respondents noted higher costs for raw materials, including a range of metals.



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This article was published on 11 Apr 2017 (last updated on 11 Apr 2017).

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