CONSTRUCTION firms shed jobs at a record pace last month as activity in the sector plunged.
The Ulster Bank construction purchasing managers index (PMI), which measures activity in the sector, showed a reading of 28.1 in March compared to 36.6 a year earlier and 54.5 in 2007.
Index readings above 50 signal an increase in activity on the previous month, while readings below 50 represent a fall in activity levels.
Activity contracted at the third fastest pace since data was first collected in June 2000 as new orders fell.
The pace of job cuts accelerated to its fastest in the history of the series, with more than half of respondents cutting jobs in the month.
Aside from employment, rates charged by sub-contractors and input prices also recorded record lows.
Ulster Bank chief economist, Pat McArdle, said: “We speculated last month that the commercial index might be levelling off. In March, it posted a second successive rise, albeit that it remains at a level that still signals significant contraction. It may now join housing which has oscillated at very low levels for the past 16 months.
“Civil engineering, in contrast, continues to fall and prospective cuts in capital spending would indicate that it may have further to go.
“The overall picture is one of an industry that is at a low ebb. That said, several other European countries are now in a similar situation.”
The sharpest decline in activity was recorded in the residential area while, after two months of being the worst-performing category, the commercial sector posted a slightly weaker reduction in March but the rate of contraction remained substantial.
Although registering the slowest decrease of the three sectors, activity on civil engineering projects fell at its fastest pace since August 2003.
Almost half of panellists reported lower activity during the month, against less than 4% that noted a rise.
Weaker confidence amongst clients as a result of the continuing downturn led to a further sharp fall in new business during March, extending the current period of decline to 24 months.
More competition among suppliers led to input prices declining at a survey-record rate in March, extending the current period of falling input costs to seven months.
In addition, Irish construction firms reduced their quantity of purchases sharply in March, with the pace of decline the second fastest in the series history, slower only than the record posted in February.
Average vendor performance improved markedly, largely due to lower workloads at suppliers.
An expectation that the current downturn will continue over the coming 12 months was behind March’s pessimistic outlook amongst Irish constructors, despite sentiment being slightly less negative than in the preceding month, according to Ulster Bank.
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