The Irish construction sector made a strong start to 2018, posting faster increases in activity, new orders and employment, as well as seeing confidence improve again. Meanwhile, input costs rose to the greatest extent in 11 years.
The latest results of the Ulster Bank Construction PMI survey paint a very encouraging picture of early-year activity trends in Irish construction. The headline PMI picked up for the third month in a row, with a highly elevated reading of 61.4 representing an eight-month high. There was a particularly notable acceleration in Commercial activity making it the fastest growing sector last month. However, the improvement was broadly-based, with the Housing PMI also rising to an eight-month high, consistent with ongoing very rapid activity growth.
In addition, there were further welcome signs of improvement in Civil Engineering which logged a second consecutive month of expansion, with a 55.6 reading marking the best performance for that sub-sector in almost two years.
Other detail within the report confirms the positive signals from the headline indicator. Notably, the New Orders index picked up again leaving it in line with the robust average pace of increase recorded to date in the recovery. And the strength of trends in current and prospective activity continues to underpin solid labour demand, with the Employment index rising to a five-month high. Overall, the January PMI indicates that, like their services and manufacturing counterparts, Irish construction firms have made a strong start to 2018.
Moreover, construction firms are looking to the year ahead with high levels of confidence, with sentiment around future prospects buoyed by expected further improvements in the wider economy and in the construction industry itself.