The Irish construction sector once again registered a sharp fall in December but the rate of decline is slowing, according to the latest Ulster Bank Purchasing Managers’ Index.
The sector posted 43.0 in December, up from 42.6 in November. Any reading below 50 signals a decrease.
The construction sector has been shrinking for six years now.
Despite the continued contraction, improved sentiment was recorded with panellists expecting better economic conditions and a stabilisation in the market over the coming year.
Simon Barry, chief economist for the Republic of Ireland at Ulster Bank, said the December reading showed ‘ongoing and broad-based declines in construction’.
“One disappointing aspect of the sector’s performance in 2012 was that the hoped-for stabilisation failed to materialise, and the industry continues to be dogged by recessionary conditions, including persisting falls in new work orders and employment levels.”
Mr. Barry explained there was still ‘some level of optimism’ within the industry as construction firms expect an improvement in the level of activity in 2013 but he said the expected improvement doesn’t look likely to happen in the early part of 2013.
The survey results showed the residential sector continues to be the strongest within the construction industry, with the latest drop in activity the weakest since last January.
The rate of job cuts slowed from November, but remained sharp.