Construction activity falls again in January

Activity in the Irish construction sector fell again at the start of the year following a stabilisation at the end of 2011, according to new data.

The Ulster Bank Construction Purchasing Managers’ Index (PMI) fell to 46.4 in January, from 49.9 in the previous month, as new business returned to contraction territory.

Jobs also continued to be cut sharply in the sector, the index indicated, although sentiment regarding future activity levels improved.

“The January reading of the Ulster Bank Construction PMI showed that the construction sector experienced contraction in activity last month,” said Ulster Bank economist John Fahey.

“Having been very close to the expansion–contraction threshold of 50 last month, it fell to 46.4 in January, representing its fastest pace of contraction in three months.”

In sectoral terms, housing activity and civil engineering were in decline while commercial activity recorded an increase.

“The construction sector remains in a job shedding mode,” Mr Fahey said.

“The contraction in employment quickened over the month, with employment continuing to decline as it has done in each month since May 2007.”

However in terms of industry expectations, construction firms still expect activity to be higher in 12 months’ time, Mr Fahey added.