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Construction activity eases slightly, but suppliers are now hiking their prices

The recovery continued to be centred on housing and commercial activity.

Image: /Photocall Ireland

NEW FIGURES REVEAL a slight easing in the rapid increase of activity in the construction sector.

However, suppliers are now taking advantage of the sector’s massive growth, with input cost inflation rising sharply.

The figures, from the Ulster Bank Construction Purchasing Mangers’ Index, shows that activity has declined slightly to an index of 60.2 in May, only slightly down from April’s near record high of 63.5.

The recovery continued to be centred on housing and commercial activity, with both areas posting substantial rises again,” the bank’s Chief Economist Simon Barry said.

“There was some welcome news with regards to civil engineering activity, which decreased at the slowest pace since the end of 2007.”

He said that the data “re-affirms” that sector is on the mend with business sentiment, which has fluctuated since late 2010, showing another rise.

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“Another notable aspect of the latest data was a sharp acceleration of cost inflation,” Barry added, “amid reports that suppliers have started to raise their charges in response to strengthening demand for inputs.”

Graph Source: Ulster Bank

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Nicky Ryan

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