Construction activity declines again

NOVEMBER proved a bleak month for the construction industry as the rates of decline in activity, new orders and employment all accelerated.

New business declined at the fastest pace since May while firms indicated they were pessimistic about the 12-month outlook for activity.

The Ulster Bank purchasing managers’ index (PMI), a measure of the performance of the construction sector dropped slightly to 34.2 in November from 34.5 in the previous month.

According to respondents, falling new business was the main cause of the latest reduction. The reading in November last year was 32.1 while in the same month two years ago the reading was 54.2. Index readings above 50 signal an increase in activity on the previous month.

Ulster Bank chief economist Simon Barry said: “While trends in other areas of the economy are beginning to move in the right direction, the latest reading of the Ulster Bank construction PMI highlights that the construction sector remains a clear laggard. The headline activity index edged lower last month, and has essentially been unchanged at very low levels since September.

“This performance is consistent with ongoing pronounced weakness across the sector. About the best that can be said is that the index is holding off the extreme lows reached at the turn of the year.”

There was no indication of improvement in the employment situation, with the jobs index of the survey continuing to point to layoffs across the industry, according to Mr Barry.

The survey showed a decline in the future business activity index with respondents concerned about the outlook for the overall economy as well as increased competition.

Of the three construction categories covered by the survey, the steepest decline in activity was registered in the commercial sector.

The November round of redundancies was the strongest in six months and employment has declined in each month since May 2007.


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