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Optimism in construction sector 'at a record high'

Construction activity has now risen for three months in a row – but it’s still very low following the economic crash.

Image: Under construction via Shutterstock

THE CONSTRUCTION INDUSTRY is showing some signs of life for the first time since the recession began.

A survey carried out every month since 2000 which tracks changes is construction activity has found that optimism among people who work in the sector has reached a record high – surpassing the previous record from July 2000.

The Ulster Bank Construction Purchasing Managers’ Index (PMI) also found that construction activity has now risen for three months in a row, with a pick-up in the rate of job creation and new orders. September’s increase was the first time that construction grew in Ireland since 2007.

Building on both housing and commercial projects rose “strongly” during November, according to Simon Barry, the chief economist at Ulster Bank.

“Near-term prospects for the sector appear favourable, judging by a further acceleration in the rate of growth of new business,” he said.

However Barry warned that the positive signs have to be seen in the context of the devastation the sector witnessed when the economy collapsed.

“Of course activity levels in construction remain extremely low following the 2007-13 crash,” he said.

“So, to reiterate a point we have made previously, the recent improvements in construction activity and confidence – as welcome as they are – need to be seen in the context of the huge declines of recent years”.

The index gives a reading of above 50 to signal an increase in activity on the previous month and below 50 for a decrease. November’s figure was 58.8, signally an increase on October.

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