Further signs of a slowdown in construction output were noted last month, with the main barometer for the sector’s health showing a second consecutive monthly dip.
But, while the new Ulster Bank Construction PMI (purchasing managers’ index) shows a 2.6 point monthly drop for August to 56.5 points, it still illustrates that the sector (any reading over the 50 point mark signifies a sector in growth mode) is in relatively rude health.
Indeed, total building output has increased continuously throughout the past two years.
“The headline PMI fell for the second month in a row in August, but these declines are from what was the second-highest reading in the survey’s history in June,” according to Simon Barry, Ulster Bank’s chief economist for the Republic.
“At 56.5, the overall PMI remains considerably above the threshold level of 50 which signals expansion.
"Similarly, solid, but somewhat slower, rates of expansion were also recorded in residential and commercial activity, though a second consecutive decline in civil engineering activity highlights that this sub-sector remains a relatively weak spot,” he added.
So, August remained a pretty good month for Irish construction.
The commercial sector remained the best-performing area, showing a measure of 56.9, albeit being the weakest level of growth seen since March.
While residential builds showed growth, this eased for the second month in a row and was the slowest rise in five months.
While those two sub-sectors remain in the high 50s, civil engineering is now down to 48.4, below the50 point mark and with a sharpening month-on-month rate of contraction.
Overall, however, despite August’s mix-bag of readings, the month saw a strong rise in new business levels for respondent companies and the rate of job creation remaining strong.
According to Mr Barry: “Against the background of the ongoing gains in activity and orders, construction firms are continuing to expand their staffing levels at a rapid pace.
"The latest official jobs statistics, from the CSO, indicate that construction was the fastest-growing sector of the economy, in terms of job creation in the year to the second quarter.”
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