Survey: Building of new homes rises
The Ulster Bank survey of purchasing managers in the industry showed activity across two of the three sectors expanded sharply last month, at the fastest pace for seven months, with construction of commercial space and housing increasing, although civil engineering struggled to grow.
The findings may give a glimmer of hope that the battered construction industry is at last responding to the huge housing crisis that is driving up house prices and rents.
Finance Minister Michael Noonan unveiled incentives for first-time buyers for newly-built homes in his budget in mid-October.
Surveys and hard data in Britain have, meanwhile, pointed to a contraction of the industry there.
It had its weakest performance in four years in the first three months after June’s vote to leave the EU, UK official figures showed last Friday, as construction volumes fell by 1.1%.
Here, instead, the survey showed continued uplift every month since September three years ago, albeit that the Irish construction industry is picking itself up from one of the worst collapses experienced anywhere in Europe during the financial crisis.
Expansion in Irish construction is also outpacing growth in Irish manufacturing, where similar surveys suggest factories making exports goods have been hit by the surging value of the euro against sterling.
The construction survey showed a headline expansion in October of 62.3, up from a reading of 58.7 in September, where a reading of 50 marks the difference between expansion and contraction.
Commercial activity, according to the survey, expanded to 64.5 from 61.3, while housing activity climbed to 63.5 from 59.5. At 50, civil engineering activity was unchanged.
Simon Barry, chief economist at Ulster Bank in the Republic, said the “encouraging” survey showed the building industry expected that housing activity would continue to expand in the coming months.
However, Ireland remains vulnerable to external shocks and construction companies cannot afford to be complacent, he said.
