Building slumps for first time in six years
CONSTRUCTION activity fell last month for the first time in six years as Brexit fears took their toll.
The Ulster Bank Construction Purchasing Managers’ Index (PMI) for September published today finds that activity slumped to 48.3 from 53.7 in August – a level of declining activity last seen when Ireland was still mired in its international bailout.
Ulster Bank chief economist Simon Barry said weak levels of commercial construction drove the overall index below the 50 level – the dividing line between growth and contraction – for the first time since August 2013.
While growth in housing activity also reached a fourand-a-half-year low, he said, its measure remains in positive territory at 52.9. It was growing at a robust 58.4 rate in August.
Mr Barry said the key factor appeared to be how “Brexit uncertainty is negatively weighing on customer demand” in the run-up to the UK’s stated deadline of October 31 to leave the EU.
September marked the first time since February 2014 that purchasing activity among construction firms decreased.
Mr Barry said the rate of contraction was modest “as some firms commented that they had brought forward their input purchases to guard against any Brexit-related supply issues”.
Employment growth in the construction sector also eased to a six-year low. The rate of new order growth declined for the third straight month and at the slowest recorded pace since 2013.
Activity in civil engineering – in negative territory since September 2018 – fell even further last month to 42.1 from 42.5 in August.