Recovery of construction sector continues to gather pace

Recovery of construction sector continues to gather pace

The country’s construction sector grew at its fastest pace so far this year in April with new business on the rise and more people working in the sector.

The industry showed further signs of recovery last month, with the Ulster Bank Construction purchasing managers’ index climbing to 57.2 from 52.9 in March.

Activity ramped up to its strongest level of the year representing the 20th consecutive month of growth, with improving client confidence and the securing of new business reportedly behind the latest rise.

Results of the survey point towards a renewed sense of optimism in the sector following a somewhat muted beginning to 2015, according to Ulster Bank Ireland chief economist, Simon Barry.

“Following disappointing readings in the first quarter, the April results of the Ulster Bank Construction PMI paint a picture of a sector experiencing renewed improvement in the early part of the second quarter.

“The headline PMI index rose sharply last month to stand at its highest level so far in 2015. The April reading of 57.2 was up noticeably from the 52.9 recorded in March and points to a marked acceleration in the pace of activity in April.”

A broad-based recovery encompassing all elements of the sector also looks to be taking hold.

Particularly strong growth was seen in the housing and commercial sectors last month while civil engineering activity also increased marginally.

April was the first month in three that each facet of the industry recorded increased business as civil engineering returned to growth.

The rate of expansion in new orders also accelerated sharply in April, quickening for the second month running to the fastest since December.

Construction businesses credited improving client demand with the 22nd successive month of rising activity.

As new orders were on the up, firms took on more workers to deal with demand in what was the biggest jump in employment of the year.

Increasing new orders also contributed to a 14th successive monthly rise in purchasing activity, with the rate of expansion the fastest in 2015 so far.

Companies are also strongly optimistic that activity will be higher than current levels in 12 months’ time.

Positive sentiment was largely reflective of forecast improvements in economic conditions.

“Reinforcing impressions of improvement was renewed strength in the new orders index which also picked up sharply to stand at its highest reading this year, while construction firms boosted their staffing levels in response to the higher levels of activity and orders.

“One month’s figures don’t make a trend of course, and so it will be important to continue to track activity patterns in the months ahead for confirmation that the regained momentum evident in April will be sustained.

“However, what is clear is that firms themselves remain solidly optimistic about the year-ahead outlook with confidence remaining close to record levels in April, notwithstanding a slight fall relative to March,” Mr Barry said.

The recent weakness of the euro against sterling and the US dollar led to rises in the cost of imported items in April. As a result, input prices increased, with the rate of inflation remaining sharp despite easing from that recorded in March.

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  1. Pingback: Recovery of construction sector continues to gather pace | Rosalie Rodney

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