The latest results of the Ulster Bank Construction PMI point to a further significant contraction in Irish construction activity in March. The headline PMI remained considerably below the 50 no-change level for the third month in a row, as activity across all sub-sectors declined sharply for the third consecutive month.
While the pace of decline in overall activity eased somewhat relative to the very extreme weakness registered in January and February, the March results again highlight that activity was markedly restrained by the pandemic-related restrictions throughout the first quarter.
Despite what has undoubtedly been an exceptionally weak start to the year, survey respondents are becoming increasingly upbeat about the prospects for recovery.
The future activity index jumped again in March to stand at its highest level in two and a half years as almost 60% of firms expect an expansion of activity over the next twelve months. The jump in confidence was underpinned by the expectation of improved business conditions for the sector as restrictions are eased and as pent-up demand is released.
Indeed, the recent government announcement that residential and childcare-related construction can restart from this week marks an important, albeit partial, step in the sector’s recovery journey.