Construction growth eases to weakest level since 2015
GROWTH in the construction sector has eased to its weakest level in more than two years.
But the sector still remains comfortably within expansion territory, according to the latest Purchasing Managers’ Index (PMI) for the sector from Ulster Bank.
The October data signalled slower growth, with weaker rises in total activity, new orders and employment all recorded.
Concerning for firms and operators in the sector was that the rate of input cost inflation quickened to a four-month high amid reports that material shortages had led to price rises.
Simon Barry, chief economist at Ulster Bank in the Republic, said the latest results show Irish construction firms continue to report healthy rates of expansion.
“The headline PMI did ease in October, consistent with some cooling in momentum fol- lowing a very strong first half of 2017, in the process reaching its lowest level since March 2015.
“Mirroring the pattern of the headline PMI, the sectoral sub-indices also painted a picture of moderating growth in October, though the housing and commercial indices both remain at elevated levels, and very much consistent with ongoing solid expansion.
“Civil engineering continued to underperform, recording a fifth consecutive monthly decline in activity,” he said.
The seasonally adjusted index – designed to track changes in total construction activity – posted 54.5 in October, down from 56.5 in September.
The reading signalled a solid monthly increase in activity, albeit one that was the slowest in more than two-and-a-half years.
The sector has now been in expansion mode for 50 successive months.
Ulster Bank said slower rises in activity were recorded on both housing and commercial projects during the month, although both continued to see marked expansions. The faster increase was registered for housing activity.
Meanwhile, civil engineering work continued to fall, and at a stronger pace than in September.
Where activity increased, panellists linked this to higher new orders. However, there were some reports that new projects were less prevalent than in previous months.