Growth in construction activity, here, climbed to a four-month high in July, new data shows, indicating Irish builders felt no immediate negative effects from Britain’s vote to leave the EU.
The latest Construction PMI (purchasing managers’ index) from Ulster Bank – widely recognised as being the leading barometer for the health of the building sector – shows a reading of 61 points for July, up from 59.7 in June.
Any reading over the 50 point mark signifies a sector in growth mode.
While residential work was marginally down on the previous month, it still measured a reading of over 61 points. Civil engineering struggled, but was still above the 50 point mark, but overall sectoral growth was driven by work in the commercial sector.
A significant rise in new business orders underpinned this activity increase. New order growth was at its highest, last month, since March; with the rise boosting job creation rates to a five-month high.
Still, Simon Barry —Ulster Bank’s chief economist in the Republic — warned against complacency.
“The July survey results offer the first glimpse into Irish construction trends following the UK referendum.
"The continuation of strong trends in overall activity and new business provide important encouragement that the sector’s recovery is maintaining solid momentum at present. It is important not to be complacent on this front, however,” he said.
“Uncertainty remains high about the extent of the possible adverse impact on the Irish economy from Brexit-related risks, even if the primarily domestic-focused construction sector isn’t in the line of fire to the same extent as the more export-orientated manufacturing sector, where recent trends have clearly deteriorated as Brexit effects have begun to take hold,” he added.
The new survey also indicates that business sentiment — amongst Irish construction firms — remains strong, with 58% of respondents predicting activity growth over the next 12 months, along with higher levels of new business and further improvement in economic conditions.
Just 9% of survey respondents see output levels falling over that timeframe.
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