At 55.5 in November, up from 52.9 in October, the Ulster Bank Construction Purchasing Managers’ Index® (PMI®) – a seasonally adjusted index designed to track changes in total construction activity – signalled a strong expansion of Irish construction activity. Overall construction activity has now increased in each of the past 63 months.
Commenting on the survey, Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, noted that:
“Growth in Irish construction activity re-accelerated in November, according to the latest results of the Ulster Bank Construction PMI survey. The rate of overall expansion picked-up from October’s over three and a half year low as the headline index rose from 52.9 in October to 55.5 in November, in the process halting a three-month sequence of deceleration from the exceptionally rapid growth recorded in the summer. There was a sharp acceleration in Housing activity making it the fastest growing sector last month. But the improvement also reflected better performance in Commercial activity, with the Commercial PMI rising to 57.5 in November from 53.9 in October. Civil engineering remains an area of weakness, however, with respondents reporting a third consecutive monthly decline in activity.
“Encouragingly, respondents also reported a marked pick-up in new business flows, with the new orders index rising to a very elevated reading – and five-month high – of 59.1 in November. In turn, strong activity and new orders patterns continue to underpin robust demand for construction workers, though the pace of job creation eased slightly in November. Sentiment about future activity prospects again edged lower in November, in the process falling to its lowest level since August 2013. However, this is best seen as a retreat from exceptionally elevated readings. Confidence levels remain solidly optimistic (at readings higher than seen on average at the peak of the last cycle in 2004-2006), with nearly 45% of all firms expecting activity to increase over the coming year.”
Housing activity fastest growing sector
Housing activity led the upturn during November, with growth at a three-month high. Meanwhile, civil engineering activity was the weakest performing of the three monitored categories, seeing activity fall for the third consecutive month and to the greatest extent since January 2014. Commercial construction activity also expanded at a quicker rate that was much faster than the survey average.