The pace of expansion in Ireland’s construction sector slowed to an eight-month low in June, but remains in solid growth mode, according to new figures published this morning.
The slower growth was attributed to weaker activity in the commercial and civil construction segments, with housebuilding still showing signs of strong expansion, according to the latest Ulster Bank Construction Purchasing Managers’ Index.
The overall reading for the index was 53.1 in June, down from 54.9 in May. Any reading above 50 indicates expansion, and readings below indicate contraction.
Simon Barry, Ulster Bank’s chief economist for the Republic of Ireland, said that while commercial activity was still expanding, a decline in the pace of growth in June left it at its weakest expansion rate in six years.
“More encouragingly, the residential sector continues to perform strongly, with the pace of housing activity growth holding steady at solid rates – a very welcome sign of sustained expansion in a key part of the sector,” he said.
However, even the strong pace of increased activity in the housing sector is still not translating into sufficient scale to meet demand. Goodbody Stockbrokers previously noted housing completions rose 22pc in the first quarter, putting the country on target to have 22,000 more units by the end of the year – still far off the 35,000 number of annual completions that it is believed is required for the market.
The latest Ulster Bank report also shows that there remains strong demand for construction workers. Employment in the sector rose for the eighth consecutive month in June.