Index shows construction sector still in decline
The latest Ulster Bank Construction PMI for March indicates that the Irish construction sector remains some way from recovery.
The Index dropped to 46.1 in March, from 47.8 in the previous month.
Activity and new orders declined again during the month, and firms cut purchasing and employment accordingly.
The reading also shows that the rate of input cost inflation in the sector accelerated further.
This latest Index also shows the reduction in activity in the sector last month was faster than that seen in February.
“Irish construction sector activity declined for the 46th month in a row in March, according to the latest reading of the Ulster Bank Construction PMI," said Simon Barry, chief economist with Ulster Bank.
"The pace of decline in housing accelerated to its fastest since December of last year.
"Meanwhile, the rate of decrease in both commercial and civil engineering slowed a little, albeit that the latter continued to show the sharpest rate of contraction of the three sectors."
Mr Barry said a lack of new business continues to dampen activity in the Irish construction sector.
"I think conditions in the construction sector remain extremely tough," Mr Barry said.
"There are two broad areas which are causing concern for construction firms.
"Firstly there is a lack of new business opportunities so new incoming orders continue to decline… that means that firms don't have any requirement to take on extra workers, so employment in the sector as well as activity levels are continuing to fall.
"The other issue that construction firms are facing is that their input costs are rising."
However Mr Barry added that some firms appeared to be more optimistic about future prospects.
" Despite the unfavourable backdrop of ongoing declines in new orders and higher input prices, almost half of the construction firms surveyed expect activity to be above the current depressed levels in 12 months’ time," he said.
"In fact, the degree of positive sentiment around future activity was the highest in some four years last month."
