PMI: Slowest Expansion of Activity in 4 Years - Construction Network Ireland - Construction Network Ireland

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Published in Construction on 10/06/2019

PMI: Slowest Expansion of Activity in 4 Years

#PMI

CNI Editor reports

The Ulster Bank Construction Purchasing Managers’ Index continued the positive run it has enjoyed since September 2013, albeit at a markedly slower pace.

The index registered 54.9 in May, down from 56.6 in April, in what was its slowest expansion in activity for four months.

“Irish construction firms continued to experience solid, though slower, growth in May according to the latest results of the Ulster Bank Construction PMI survey,” said Simon Barry, chief economist for the Republic of Ireland at Ulster Bank.

A reading over 50 indicates expansion and one under 50 shows contraction.

The survey showed housing once again recorded the fastest rise in activity of the three monitored sub-sectors for the fifth month running during May. Commercial activity also increased, albeit at the slowest pace since August 2013.

Civil engineering activity remained in the doldrums and declined for the ninth consecutive month, with the rate of contraction quickening slightly from April.

Despite the continued expansion of the construction sector, Ulster Bank said that the pace of job creation eased from April to the slowest rate since March 2015.

“New business and employment levels continued to rise at healthy rates in May, albeit in line with overall trends, both indices eased last month.

“This was particularly evident in the case of employment, with the rate of job creation dropping to its slowest pace in over four years,” said Mr Barry.

The outlook for the sector remains bullish, with optimism among Irish construction firms up to a three-month high, with 39pc of panellists expecting activity to increase over the coming year.

Positive sentiment was linked to expectations of stronger demand and greater access to skilled labour and financing, the survey said.

Construction firms, along with others, have started to register concerns over the availability of labour as the economy has pushed ever closer to full employment.

There are now 2.3 million in work in the State, a record number, and the seasonally adjusted unemployment rate stands at just 5pc