New orders fuel construction boom

ACTIVITY in the construction industry increased last month, as the industry’s workforce expanded for the 29th successive month.

This is according to the latest Ulster Bank Construction Purchasing Managers’ Index, which measures performance of the construction economy.

The index indicated a pick-up in the rate of activity expansion, registering a five-month high of 60.2, from December’s 59.1.

The index said continued new order gains encouraged constructors to hire more staff in January.

Chief economist at Ulster Bank, Pat McArdle said: “It was more of the same with all three engines running sweetly and the rate of increase in overall construction sector activity nudging up again in January. Strong growth in new orders, employment and costs were the hallmarks of the first month of 2006.”

Mr McArdle added: “The latter is surprising as it was attributed to energy costs, which in general eased back in recent months, while the latest spike in oil prices has yet to feed through to petrol pump prices.”

Indeed, fuel costs were one of only two items to have fallen in price. Housing pulled back from the extraordinary level reached in December but still painted a stronger picture than the housing starts data, which indicated that completions will be little changed from their 2005 level of 81,000.

All three broad areas of the construction economy covered by the survey recorded activity gains.

After recording the slowest expansion in December, civil engineering growth accelerated to a 13-month peak, outperforming both commercial and housing.

Commercial and housing activity growth eased but remained strong.

The rate of new order growth reached a five-month high, according to the index.

Raw material costs, meanwhile, increased at the fastest pace for three months.