Another good month of growth for the construction industry

Another good month of growth for the construction industry

Ulster Bank’s construction industry monthly monitor pointed to another month of good growth in January on the back of new orders.

The Ulster Bank Construction PMI – a seasonally adjusted index designed to track changes in total construction activity – posted a reading of 55.7 in January.

However, that was down from 58.9 in the previous month and the index signalled a slower pace of expansion for the third month in a row.

Any figure above 50 signals growth in a sector, while a figure under 50 signals contraction.

Ulster Bank said the rise in total activity continued to reflect growth in both the commercial and housing categories.

The stronger rise at the start of the year was recorded on housing projects, but civil engineering activity continued to fall, extending the current sequence of decline to three months.

January saw a near record rise in employment in the sector as companies deal with bigger workloads, but the pace of input cost inflation rose to its sharpest rate in ten years.

That is expected to have a knock on effect on tender prices.

Simon Barry, chief economist at Ulster Bank, said that the Irish construction activity continues to grow at a healthy pace.

“The headline PMI index remained comfortably in expansion territory in January, albeit that the pace of growth eased for the third month running consistent with a modest loss of momentum early in 2017 after a robust end to last year,” the economist said.

He said that respondents to the Ulster Bank survey continue to judge the Irish construction outlook to be very favourable.

“Confidence about future activity prospects remained strongly positive in January amid further solid gains in new orders, despite some easing in the rate of increase,” Mr Barry said.

“Indeed, buoyed by the ongoing increase in work volumes, last month saw a substantial and accelerated rise in staffing levels with the rate of job creation picking up to its second-fastest in the survey’s 16 and year history,” he added.

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