Data shows construction sector may be stabilising

Data shows construction sector may be stabilising

Simon Barry of Ulster Bank

New data shows that the total activity at Irish construction firms fell slightly during December and that new orders rose – suggesting a stabilisation of the sector at the end of 2011.

The December Ulster Bank Construction Purchasing Managers Index (PMI) rose to its highest level in over four and a half years.

This sparked a rise in positive sentiment in the industry for the second consecutive month, and was the highest since August.

The results also point to a slight increase in housing activity last month – the first time the survey has pointed to a rise since October 2006.

However, buying and employment both continued to fall during the month – and a number of firms reported that business conditions remained fragile.

“The latest reading of the Ulster Bank construction PMIs for December is telling us that there was really a negligible activity last month, ” said Simon Barry, Chief Economist at Ulster Bank.

“And after a four-and-a-half year slump in activity I think that is good news.

“However I think it probably would be wrong at this stage to conclude that a strong recovery is imminent.

“The construction sector continues to face difficulties – however we are seeing some indications now that the slump in activity is … at least approaching its end,” said Mr Barry.

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