Irish construction activity grows further

Ulster Bank Construction Purchasing Managers' Index survey data for June shows further growth for the Irish construction economy.

Ulster Bank Construction Purchasing Managers' Index survey data for June shows further growth for the Irish construction economy.

At 56.6, the index - a seasonally adjusted index designed to measure the overall health of the construction economy - indicated robust growth.

The headline index rose for the second successive month following April's recent low.

Commenting on the survey, Pat McArdle, Chief Economist at Ulster Bank, said: "Earlier this year, there was a widespread expectation that housing output of 77,000 units in 2004 would be the peak and that 2005 would see a modest fall in output. Not alone is there no sign of a contraction, the PMI results for the first half of the year are strongly indicative of continued expansion.

"However, the survey evidence does point to some softening.

"The housing industry appears to have peaked in the third quarter of 2004 and while it is still growing, the rate of increase is now significantly lower.

"This is in line with the decline in house price inflation in recent months and is indicative of a soft landing rather than a house price crash.

"However, the longer the expansion, the greater the risk of an eventual sharp correction. June was a good month for activity everywhere and the Irish construction industry was no exception with both housing and commercial construction picking up."

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