Building optimism at near-record high according to the Ulster Bank Construction Purchasing Managers’ Index

Optimism amongst Irish construction firms has reached a near-record high, on the back of new business orders hitting a five-month peak in November.

Building optimism at near-record high according to the Ulster Bank Construction Purchasing Managers’ Index

While the latest edition of the Ulster Bank Construction Purchasing Managers’ Index — seen as the primary barometer of health for the Irish building sector — posted a marginally lower reading than for October (55.5 points as opposed to 56.3 points) November’s activity still signalled another strong performance for the sector, in which activity has now increased in each of the past 27 months.

“The Irish construction sector continues to experience solid growth, according to respondents to the latest survey,” said Simon Barry, chief economist for Ulster Bank in the Republic.

“The headline PMI index fell a fraction in November, but at 55.5, it remains well above the 50 break-even level and continues to signal widespread gains in activity.

All three major sectors [housing, commercial and civil engineering] recorded expansion again, with the pace of activity picking up in commercial projects and easing slighlty in housing and civil engineering,” he added.

The November survey also showed a marked increase in staffing levels, on the back of the upsurge in new work orders.

As well as raising internal employment, constructors made more use of sub-contractors during the month, according to the data.

“The ongoing increases in current and prospective activity levels continue to underpin rising demand for construction workers, with the employment index also rising to its highest level since June,” Mr Barry noted.

Regarding the rise in positive sentiment amongst respondents, Mr Barry said that optimism amongst building firms now stands at teh third-highest level in the survey’s 15-year history and has been on the up for two consecutive months now.

“A pick-up in enquiries and an improving economic environment, more generally, are contributing to bullish sentiment among construction firms as the year draws to a close with two-thirds of respondents expecting activity to increase over the coming 12 months,” he said.

The fastest expansion seen in November was in commercial projects.

Housing activity increased at a sharp pace, albeit the weakest seen since August, while civil engineering again posted the slowest expansion of the three monitored categories.

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