Building industry growing strongly

THE construction industry registered 36 months of consecutive expansion in August, the latest Ulster Bank Purchasing Managers’ Index (PMI) has found.

The index increased from 57.7 in July to 57.8 in August. The PMI now remained above the 50.0 mark separating expansion from contraction in each month of the past three years.

According to Ulster Bank chief economist Pat McArdle, anecdotal evidence suggested that the growth of new orders underpinned the latest rise in construction activity.

“Confidence in the industry remains high, albeit at the least marked level for nearly a year. At the same time, activity, new orders and employment all continue to expand quite strongly.

“The rate of increase in housing output was broadly unchanged in August as was that of the industry as a whole given that shifts in civil, down a bit, cancelled out commercial, which was up a bit.”

For the third month in a row, civil engineering activity rose at the sharpest pace of the three monitored construction areas.

Civil engineering activity rose at a sharp pace, albeit below July’s 20-month high. The rates of expansion of both commercial and housing activity were robust in August, Mr McArdle said.

The volume of new orders received by Irish construction firms rose strongly in August. More than 36% of firms indicated that new work had increased since the previous month.

New business has now expanded in each month since September 2003, and the rate of new work growth in August was broadly in line with the average for the current expansionary period.

Increased workloads contributed to a robust rise in employment in the Irish construction economy in August. Staffing levels have increased in each month since September 2003.