Confidence up as building activity rises

Building activity rose rapidly in the final quarter of last year according to the Ulster Bank Construction Purchasing Managers’ Index, with builders believing the upturn has finally arrived.

Chief economist Republic of Ireland at Ulster Bank, Simon Barry, said confidence in the sector is being buoyed by the economy’s recovery. The vast majority of builders believe the recovery in construction will grow as the year goes on.

“Sentiment around the 12-month outlook reached a second consecutive record high for the survey as two-thirds of firms indicated they expect activity to be higher in a year’s time than in December.

“Perceptions of improved conditions in the Irish economy generally, along with opportunities in overseas markets, were the main drivers of the high confidence levels, as Irish constructors clearly believe their industry has turned the corner following what has been a brutal downturn for the sector,” Mr Barry said.

Although the seasonally adjusted monthly reading for December was down slightly on November, the index was still well above the 50-mark indicating growth.

The index, which tracks changes in construction activity, posted a 58.3 with builders reporting strong new orders and high levels of confidence.

Mr Barry said: “Home-building remains the strongest sub-sector, with the latest improvement in the housing index taking the rate of expansion to its fastest in almost nine years.”

As a result of the growth in construction there has been an increase in the levels of employment. Rising workloads led construction companies to increase their staffing levels for the fourth successive month.

“Rising activity and a further sharp increase in new business levels have prompted firms to continue to expand their staffing levels: the survey showed a fourth consecutive monthly gain in employment, though the pace of increase eased slightly last month,” he said.

“Looking to the year ahead, Irish construction firms are optimistic that the signs of improvement that took hold over the second half of last year will be sustained through 2014,” Mr Barry said.