Building activity falls again

Construction activity remained in decline in May, meaning the sector has now been in freefall for five years.

A resolutely downbeat latest edition of Ulster Bank’s Construction PMI summed up the sector’s latest woes: “New orders decreased at a solid rate during the month, falling workloads led to a further reduction in staffing levels, and firms cut their purchases of inputs at an accelerated pace.”

The May index was measured at 46.3 points. Although better than the 45.4 reading in April, it is still well below the neutral 50 point mark, which divides an industry in growth mode from one in decline.

The fastest reduction, seen in May, was unsurprisingly in the area of residential activity.

“The wider construction sector remains bedeviled by a scarcity of new business, and this was again a feature of the May survey results, with signs of stabilisation around the turn of the year giving way to renewed weakness in recent months,” said Ulster Bank chief economist Simon Barry.

“Order levels for new work fell for the fifth consecutive month, and the rate of decline picked up to its fastest pace in three months. In turn, the shortage of new business remains a negative influence on employment trends in the sector. Last week’s Quarterly National Household survey showed a 3,700 quarterly fall in construction employment in the first quarter.

“The more timely results from the April and May PMI surveys point to further job losses in the second quarter,” Mr Barry added.

According to the latest survey, the decrease in staffing levels among building firms marked the 61st consecutive month of job-shedding within the sector.