Boost for building firms as new figures show growth
THERE were signs that the building industry may be close to the bottom as the Ulster Bank Construction Purchasing Managers' Index of new business rose for the first time since March 2007. The rise in new orders encouraged firms to remain optimistic regarding future prospects for activity, the index showed.
Activity also decreased at a slower pace than previously in the commercial and civil engineering sector, with the rate of contraction the smallest in three years.
"The index of future business activity reached its highest level since early 2007 as firms continue to believe they will see some increase in activity as they look 12 months ahead," said Ulster Bank economist Simon Barry.
"As heartening as this development is, the increase is very modest and it is probably more an indication of possible stabilisation in the sector at very weak levels rather than a strong recovery any time soon," he added.
The trends pushed the headline figure to 45 last month from 44.9 the previous month. The new figures indicate that the building sector is still contracting after three years. Any figure over 50 suggests the sector is expanding while below 50 suggests it is contracting.
"Conditions in the Irish construction sector clearly remain very tough," said Mr Barry.
"With activity levels across all three sub-sectors of housing, commercial and civil engineering continuing to slide, firms are continuing to cut back sharply on their employment levels, though the pace of job cuts did ease to the slowest seen since September 2007."