Construction firms look to Britain

IRISH construction firms are looking to expand in other locations, especially Britain as new figures show the sector is still being crippled by job losses and falling orders.

There were, however, some slight indications of easing in the rate of contraction, in the Ulster Bank Purchasing Managers Index (PMI) which rose to 36.1 in January from 33.1 in December.

This is the highest reading for the index since August.

Ulster Bank chief economist, Simon Barry said although there was no indication of any improvement in employment dynamics some of the forward-looking elements of the survey showed a bit more promise.

“The new orders index jumped by over eight points to its highest level in over two years, orders are still declining but some sense here that the pace of deterioration is easing.

“More encouraging was a 10-point surge in the future expectations index which rose to a 31-month high.

“The January survey picked up a clear improvement in optimism as respondents expressed an expectation that the wider economy will improve over the coming year.

“There were also indications that Irish construction firms are seeking growth opportunities in markets abroad, with a number of respondents looking to the UK in this regard,” he said.

Each of the three monitored sectors posted lower activity during January. The steepest fall was registered in the civil engineering category, where activity fell for the twenty-sixth successive month.

The commercial sector registered the weakest decline in January, although the contraction was still substantial. Activity on residential projects meanwhile has fallen in each month since November 2006.

Firms continued to shed jobs last month with, at the steepest rate since May last year.

On a positive note optimism regarding future activity levels rose to its strongest in 31 months and was higher than the long-runseries average.

The index said that positive sentiment reflected an expectation that wider economic conditions will improve.

The Society of Chartered Surveyors has predicted that 40,000 more jobs will be lost in the property and construction sector this year.

This means that the number employed in the sector will fall to under 100,000 having been as high as 267,000 in 2007.

President of the Society of Chartered Surveyors, Ken Cribbin said: “As a matter of urgency the Government needs to tackle this unemployment crisis. That involves real political leadership and engagement and we need it now.”