Orders in building sector increase

NEW orders in the construction sector increased in December, but employment levels continue to fall, the latest Ulster Bank Construction Purchasing Managers’ Index shows.

However, Ulster Bank chief economist Republic of Ireland, Simon Barry, said there were further signs that the construction sector may be approaching a point of stabilisation in the latest reading of the index.

“The December survey featured several encouraging developments, including that the overall PMI rose to its highest level in over four-and-a-half years. At 49.9, the PMI is just a fraction below the expansion-contraction threshold level of 50, indicating that the pace of decline in construction activity last month was negligible.

“The results point to a slight increase in housing activity last month — the first time the survey has pointed to a rise since October 2006 — while the rate of decline in Commercial activity eased for the fifth month in a row to just a fraction below the 50 level. As has been the case for most of the past two years, activity in Civil Engineering continues to under-perform quite markedly and, unlike the other two sub-sectors, is continuing to contract at a sharp pace,” he said.

The index found that, on the price front, the rate of input cost inflation moderated for the second month in a row.

Also offering encouragement, Mr Barry said, was a rise in the New Orders index to back above 50 for the second time in three months, as some firms reported higher levels of new business.