Construction firms in Ireland have begun experiencing delays in securing supplies due to the global impact of the coronavirus.
The monthly survey of construction purchasing managers by Ulster Bank found that delivery delays in February hampered efforts by some firms to secure supplies.
According to respondents, longer delivery times generally reflected stormy weather during February, but there were some incidences of delays caused by the outbreak of coronavirus in China.
The PMI index for February was 50.6, down slightly from 50.9 in January and signalling a modest increase in total construction activity in Ireland. Index readings above 50 signal an increase in activity on the previous month and readings below 50 signal a decrease.
The February expansion was the third in as many months, but the softest in this sequence. Construction firms linked the rises in new orders amid improving demand. However, the stormy weather during February limited the pace of expansion.
The strength of the commercial construction sector at 55.2 masked a decrease in residential construction at 49.7 with the Housing PMI signalling a second consecutive monthly decline in activity.
However, the contraction was only marginal and activity likely would have returned to expansion had it not been for the adverse weather last month.
Simon Barry, Chief Economist at Ulster Bank said firms remain optimistic about the coming year.
“While sentiment eased back a little last month from January’s one-year high, firms indicated that they were confident that new business would improve over the coming year, with almost 40% of respondents anticipating higher output levels in the coming 12 months,” he said.
However, the global spread of the coronavirus represents a new important source of downside risk to the Irish economy as we look ahead, albeit that the mainly domestic-facing construction sector is perhaps less directly exposed to adverse virus impacts than the more heavily trade-and tourism-dependent areas of the economy.
"However, it is noteworthy that some impacts on construction are already being felt as some respondents mentioned the outbreak of the virus in China as a factor contributing to delays in deliveries from suppliers.”