CONSTRUCTION firms shed more jobs last month as the sector continued to battle through what has been the longest period of decline on record.
A marginal increase in new business was recorded, however, with many construction employers saying this time next year things won’t be as bad. Activity and employment both fell in August, extending the current periods of decline to 39 and 40 months respectively.
The Ulster Bank construction Purchasing Managers’ Index (PMI), which tracks changes in construction activity, remained below the no-change mark of 50 in August, signalling a further reduction of activity in the sector. However, the reading of 48.4 is up from 45 in July and indicated the rate of contraction was the weakest in the current sequence, which began in June 2007.
Ulster Bank economist Lynsey Clemenger said: “While the manufacturing and services PMIs have signalled expansion over the past five to six months, the latest reading of the Ulster Bank construction PMI reveals that operating conditions in the Irish construction sector remain particularly tough. In fact the PMI is telling us that the sector has been in contraction for 39 months now, by far the longest period of decline in the survey history.”
The study found new work is still scarce and there is a continued focus on cost containment. “However, there were also some tentative signs of encouragement in the... survey. Even though activity is still contracting, the rate of decline continues to ease, with the headline index now at its highest level since May 2007.” All three of the monitored construction sectors posted declines in activity during the month, with civil engineering registering the fastest rate of contraction. Activity on residential projects fell for the 46th month running, while the weakest fall was seen in commercial activity.
New orders rose for the second consecutive month in August but the rate of expansion was again marginal.
© Irish Examiner Ltd. All rights reserved