The index showed a reading of 55.7 in September, rising from 49.7 in August. Any figure above 50 signals growth in the industry, while a figure under 50 signals contraction.
Since 2007 the value of the industry’s output fell by €30 billion a year to €8 billion, while employment has fallen from more than 350,000 to about 100,000.
The biggest increase in activity was seen on housing projects last month, with the rate of expansion there the steepest since December 2005. The index notes that commercial activity also rose at a marked pace in September, and while civil engineering activity decreased again, the rate of contraction eased to the slowest in its 70 months of declines in a row.
Employment levels stabilised at Irish construction firms, ending job cuts which began in May 2007. Companies said they raised staffing levels due to increased workloads.
“The September results of the Ulster Bank Construction PMI provide further evidence of improved trends in the Irish construction sector. Significantly, overall activity rose for the first time in over six years, as the headline PMI index jumped by six points to get back to above the 50 breakeven level for the first time since May 2007,” commented Ulster Bank’s chief economist Simon Barry.
However, he noted that building companies sid 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.
“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,” the economist added.
However, another survey from Link2Plans has said there is a continued decline in housing construction activity across the country.
The National Housing Construction index measures every submitted planning application and planning commencement across Ireland from January to August.
But Link2Plans said that while there is a fall in both planning applications and commencements, there are signs of improvement on earlier indices this year.
Planning applications are down 6% this year, with project commencements falling by 10%.
Six counties – Kildare, Dublin, Carlow, Donegal, Monaghan and Kerry, show planning application increases, up from two this time last year. Offaly, Leitrim, and Sligo saw the biggest application drops of 29%, 31% and 39% respectively.
Commencement notices fell in general, but five countries saw increases – Roscommon (51%), Longford (8%), Meath (8%), Dublin (8%) and Wexford (3%).
”There are clear signs of improvement, especially in Dublin where both applications and commencements are up,” commented Link2Plans’ managing director Danny O’Shea.
“It will be interesting to see if the good weather experienced over the past few weeks will see the next edition of the index register an increase,” he added.