Construction sector growth slows

GROWTH in the construction sector slipped in November, a report from Ulster Bank reveals.

But the industry continues to grow, with construction activity increasing for 27 consecutive months. The Ulster Bank Construction Purchasing Managers’ Index recorded a reading of 58.2 in November, down from 59.2 in the previous month. Any reading above 50 indicates that the sector expanded.

Ulster Bank economist Pat McArdle said the housing market was once again coming to the rescue of the economy. Both the civil engineering and commercial building sectors also experienced growth, though housebuilding increased at the fastest pace for three months.

“There was a third-quarter mini housing boom when demand, house prices and, if the official statistics are to be believed, supply, all rose unexpectedly,” Mr McArdle said.

“Both commercial and civil eased off recent highs while housing activity gained ground. There is no sign of a slowdown in hiring and confidence remains high. Falling energy prices were reflected in a significant slowing in the rate of cost inflation,” he said.

November’s rise in construction activity stemmed from a sharp increase in Irish constructors’ new business levels, the report said, with building firms indicating further success acquiring large contracts.

Mr McArdle said the rate of job creation in the sector accelerated in November, following October’s low, with many apprentices recruited as part of long-term expansion plans.

The report also found that higher fuel and wage costs led to a strong rise in input prices during November. However, the rate of inflation eased to a five-month low and was well below the average for 2005 so far.