You are viewing the content for Monday 14 September 2009

Jobs in sector cut but rate of contraction eases

THE construction sector has cut jobs for the 28th month in succession, according to Ulster Bank Construction Purchasing Managers’ Index.

The seasonally adjusted index, designed to measure the overall performance of the construction economy, rose slightly to 38.8 in August, from 37.9 in July.

However, while the rate of contraction eased to its slowest since November 2007, it was still substantial.

Ulster Bank economist Lynsey Clemenger said that while the indexremains below the 50 mark and is therefore continuing to clearly signal contraction, the pace of this contraction is easing.

"The index has been on a gradually less-negative trajectory for five consecutive months now, having hit a record low in January of this year.

"In terms of the sectoral breakdown, housing activity remains at a very weak level and continues to under-perform, albeit that the rate of decline inAugust was the slowest in over two years.

"Interestingly, from a forward-looking perspective, the expectations component of the index remained above the 50 level for the third month running, as constructors continued to take the view that economic conditions over the next 12 months will improve," she said.

All three areas of construction activity continue to decline. For the second consecutive month, activity on residential projects fell at the sharpest rate of the three monitored areas.

"This was despite the pace of reduction slowing to its weakest in 27 months. Activity on civil engineering projects fell substantially in August, and at a steeper pace than in the preceding month.

"The weakest fall in activity was for commercial projects, although the decline was still considerable," according to the survey’s authors.

The survey shows new business at Irish constructors fell sharply in August as clients continued to postpone new spending.