The Irish construction sector continued its strong start to the year in February, seeing further sharp increases in activity and new orders, and a faster pace of job creation. Marked increases in demand for inputs to support growth of activity led suppliers to increase their prices and resulted in delays in receiving purchased items. The Ulster Bank Construction Purchasing Managers’ Index®(PMI®) – a seasonally adjusted index designed to track changes in total construction activity – posted 59.2 in February, down from 61.4 in January but still signalling a substantial monthly increase in activity during the latest survey period. Activity has risen continuously on a monthly basis throughout the past four-and-a-half years. The latest expansion was linked by panellists to improving market conditions and greater client activity.
Commenting on the survey, Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, noted that:
“Building on the very positive start to the year noted in last month’s report, the February results of the Ulster Bank Construction PMI survey indicate that Irish construction firms continue to report very rapid expansion. While the headline PMI eased back from the eight-month high recorded in January, at 59.2 it still remains at very elevated levels consistent with robust growth in activity. Particularly encouraging was a further acceleration in Housing activity where growth picked up to a ten-month high, leaving it as the strongest performing sub-sector last month. Growth in Commercial activity was also very strong, albeit that the pace of expansion eased slightly in February. And Civil Engineering recorded a welcome third consecutive month of expansion, though the pace of growth was more modest than in the other sub-sectors.
“The February results mark four and a half years of continuous expansion among Irish construction firms, and forward-looking elements of the survey suggest that near-term prospects remain positive. New orders continue to increase sharply, while there was also a strengthening of confidence about the year-ahead outlook. Sentiment rose to an eight-month high and was one of the strongest readings since the survey began over seventeen years ago, with over 60% of firms anticipating further activity gains in the coming twelve months.”
More in the next issue of Irish Construction Industry Magazine.