Construction activity on the rise

CONSTRUCTION activity continued to rise in December, the latest Ulster Bank Purchasing Managers’ Index report.

Having hit a four-month low, the industry’s growth accelerated once again, the bank’s chief economist c said.

The Index recorded a reading of 59.1 in December, up from 58.2 in November. A reading above 50 indicates that the industry experienced growth.

The PMI shows the housing sector continued to power ahead, as did the civil engineering market. Only the commercial construction sector saw a slight decline in activity, though it still recorded a reading above 50.

Mr McArdle said: “The Construction industry seems to have ended 2005 on the boil with all three sub-sectors recording readings around the 60 mark, indicating very strong expansion indeed.

However, he noted that the overall average for the year was slightly below the exceptional 2004 performance.

“This mainly reflected a weaker average performance by civil engineering which had a poor first half.”

Housing activity was also slightly weaker but not by enough to challenge the view that house completions were close to 2004’s record 77,000 level. “Nonetheless, this is a significant change from the strong rates of housing growth experienced in the preceding three years,” he added.

Mr McArdle said it was no surprise that the construction industry was in optimistic mood for the next 12 months with new orders, public and private strong, and increased inquiries.

“Despite higher employment - the rate of job-creation accelerated to a six-month high - the use of sub-contractors was the strongest in more than five years as a greater proportion of work had to be outsourced.”

The report also found that with increases in the price of oil continuing to mean higher transportation costs, average input prices faced by Irish constructors rose sharply in December.