Rate of job losses in construction intensifies

The rate at which jobs are being lost in the construction sector intensified last month with activity and new business also falling at faster rates, the Ulster Bank Construction Purchasing Managers’ Index indicates.

The seasonally adjusted index, designed to track changes in total construction activity, dipped to 42.2 in July from 42.5 in June — the break-even level is 50. This is the 62nd consecutive monthly reduction in activity, and the sharpest since last September.

Ulster Bank’s chief economist Simon Barry noted that construction companies lowered their employment levels in July, as has been the case in each month since May 2007 and that the pace of reduction was the strongest in six months. Panellists linked the latest fall in employment to decreased workloads.

Mr Barry said there was a slight easing in the pace of decline in housing activity, but activity fell at a sharper pace in both the commercial and civil engineering sub-sectors, with the latter recording the weakest performance of the three sub-sectors in July. “Near-term prospects for the construction sector do not look encouraging. Signs of stabilisation in new orders around the turn of the year have given way to renewed weakness in recent months, in turn dampening hopes for a stabilisation in construction activity levels more broadly.”

On a positive note, input costs fell modestly in July, ending a 26-month sequence of inflation.