Irish construction industry sees increase in activity

The Irish construction sector enjoyed a sharp increase in activity in November according to the latest Ulster Bank Construction Purchasing Managers’ Index (PMI).

The headline PMI dropped slightly in November to 55.5 from October’s reading of 56.3 but still well above the growth threshold of 50.0.

The three main sectors within the industry all posted sustained growth. Commercial activity saw the fastest rate of expansion, with house building and civil engineering also experiencing growth all be it easing from the previous month’s figures.

The industry also saw an increase in the rate of job creation, rising at its fastest rate since June.

Optimism amongst Irish construction companies improved for the second consecutive month and was the third–highest in the history of the survey.

Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, commented: “Several other aspects of the detailed results provide encouragement about the sector’s performance at present. There was a notable acceleration in new business growth recorded by firms last month, with the New Orders index picking up to a five-month high. Furthermore, the ongoing increases in current and prospective activity levels continue to underpin rising demand for construction workers, with the Employment index also rising to its highest level since June.

“Finally, optimism levels among firms rose for the second month running and now stand at the third-highest in the survey’s fifteen-year history. A pick-up in enquiries and an improving economic environment more generally are contributing to bullish sentiment among construction firms as the year draws to a close, with two-thirds of respondents expecting activity to increase over the coming twelve months.”

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