Fall in new business adds to construction industry woes
Published 08/11/2010 | 05:00
IRISH construction declined at a faster pace in October as client uncertainty led to a fall in new business, the Ulster Bank Construction Purchasing Managers' Index (PMI) found.
Managers surveyed reported that purchasing activity decreased strongly in response to contracting demand, while firms continued to reduce employment.
The seasonally adjusted index fell for the second month running, to 42.3 in October, from 44.5 in September. The reading was the lowest since May and signalled a steep reduction in construction activity, with any reading under 50 indicating decline.
"It is clear from the report that the industry continues to face major challenges given the lack of incoming business," said Lynsey Clemenger, economist at Ulster Bank.
"New orders fell back for the second consecutive month in October, with survey respondents noting uncertainty about the wider economic environment as a key factor in explaining why clients are holding back on spending. For builders themselves, the upcoming cuts in government spending are a concern in terms of what this will mean for activity in the industry in the coming year."
The renewed weakness in October was concentrated in the civil engineering and commercial sub-sectors. While activity in the housing sector continued to fall, the rate of contraction eased back, albeit in the context of extremely low levels of activity.