CONSTRUCTION ACTIVITY IN Ireland is up for the first time since May 2007.
The Ulster Bank Construction Purchaing Manager’ Index (PMI) said that new orders expanded at a sharp and accelerated pace, which has led to a growth in purchasing activity and a stabilisation of employment.
Sentiment among construction firms regarding the 12-month outlook is one of the strongest in the history of the series, says the survey.
Increase in activity
In September, the PMI reading posted was 55.7. In August it was just 49.7 in August. This is the first time since 2007 has a posting above 50.0 been registered.
When broken down, construction in the housing sector, rose from 53.8 in August to 59.5 in September, while commercial activity rose from 51.0 to 56.1. Civil engineering activity rose form 41.0 to 47.3.
The survey finds that employment stabilised at Irish constructors, ending a sequence of job cuts which began in May 2007. Those respondents that raised staffing levels indicated that this was largely reflective of increased workloads.
Reasons for increasing staff levels included that lead times on the delivery of inputs lengthened again in September.
Panellists reported that higher new orders and signs of improvements in economic conditions had contributed to growth of activity.
Simon Barry, Chief Economist for the Republic of Ireland at Ulster Bank said that the September results show that the “nascent recovery in activity levels is producing a stabilisation of employment among survey respondents”.
He added that firms reported that cost considerations continue to weigh on their hiring plans – “an indication that respondents remain understandably cautious following what has been a brutal downturn for the sector,” he said.
Nevertheless, forward-looking elements of the survey offer encouragement about future prospects. New orders recorded a third consecutive monthly rise as firms reported rising new business levels at home and overseas, while there was also a further improvement in business sentiment, with optimism about the 12-month outlook reaching the strongest since January 2004.