Construction 'to stay under pressure' for near-term, survey warns

Steepest decline in housing but falls in commercial construction and civil engineering activity were the largest seen since April and May of last year, respectively

Housebuilding activity took the worst hit as construction activity tanked in January due to Covid restrictions.

The construction sector is expected to continue to suffer “significant pressure” for the foreseeable future, as lingering Covid restrictions take a toll, but building firms remain confident about prospects over the next 12 months.

“The sector is likely to remain under significant pressure in the near-term,” said Simon Barry, Ulster Bank’s chief economist in the Republic. “But, more encouragingly… Irish construction firms continue to express optimism in the year-ahead outlook, reflecting expectations that workloads will improve again once the health picture improves and restrictions are eased,” he said.

Mr Barry was speaking on the back of the latest edition of Ulster Bank’s monthly construction sector index showing a predictable sharp fall in building activity in January as strict Covid restrictions were reimposed by the Government.

The slump followed a marked expansion of building activity in December.

The steepest decline in activity was in housing but falls in commercial construction and civil engineering activity were the largest seen since April and May of last year, respectively.

January’s activity fall was the sharpest in eight months and the month also saw the greatest decline in staff hiring activity since last May.

Meanwhile, the Government has launched a public consultation process into proposed legislation aimed at rescuing small and micro-businesses, which make up the bulk of companies in Ireland.

Minister for Trade Promotion, Digital and Company Regulation Robert Troy has launched the consultation, which seeks views on the proposed ‘Summary Rescue Process’.

"The issue of company rescue has become ever more urgent as companies struggle with the continued impact of Covid-19," Minister Troy said.

“While we know that examinership is internationally recognised and works well in its current form, the associated costs are beyond the reach of our small and micro enterprises and act as a barrier to access. This must be addressed as smaller businesses continue to struggle with the impact of the pandemic on their liquidity," he said.