Building work up 16% in Q2

Irish construction output grew by 16.5%, year-on-year, in volume terms during the second quarter of the year, according to fresh CSO data published yesterday.

On a rolling quarter-by-quarter basis, the second three months of the year saw a 6.3% increase in building work. On an annualised basis, the value of construction production grew by 17% in the quarter, according to the CSO.

The growth was mainly driven by the residential sector, but was only cautiously welcomed by analysts.

“These exceptional growth rates must be seen in the context of activity bouncing back off a low base. Housing completions are still averaging just 13,500 a year at present; well below demographic demand,” said David McNamara of Davy Stockbrokers.

Monday sees the publication of the latest Ulster Bank construction purchasing managers’ index — seen as the main barometer of health for the sector in Ireland — which will give a more up-to-date picture as it will measure progress made in August.

Meanwhile, British construction output held steady during the first full month after the country’s June vote to leave the EU, bucking expectations for a fall, while the country’s trade deficit narrowed slightly, official data showed yesterday.

UK construction volumes were unchanged in July after a 1% drop in June, a smaller fall than the average 0.8% decline forecast in a Reuters poll, the UK’s Office for National Statistics said.

However, compared to a year earlier, volumes were 1.5% lower, the biggest drop since April 2013 — though a smaller decline than the 3.2% economists had forecast.

Yesterday’s figures are the first official numbers on Britain’s construction industry, which makes up 6% of the country’s economy.

They follow a closely watched survey of purchasing managers which pointed to the steepest decline in seven years in July, before rebounding in August.

“Construction output remained steady in July with growth in infrastructure offset by falls in repair work and commercial buildings,” said ONS statistician Nick Vaughan.

“There was strong growth in construction orders, led by housing, after nearly two years of orders remaining relatively flat.”

The ONS said there was very little anecdotal evidence that the vote to leave the EU had affected construction output.


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