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Building activity surged in June as sites reopened after the lockdown

 

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Back to work: Compliance officer John Gaskin puts up Covid-19 social distancing signs on a building site in Dublin city centre during lockdown. PHOTO: GARETH CHANEY/COLLINS

Back to work: Compliance officer John Gaskin puts up Covid-19 social distancing signs on a building site in Dublin city centre during lockdown. PHOTO: GARETH CHANEY/COLLINS

Back to work: Compliance officer John Gaskin puts up Covid-19 social distancing signs on a building site in Dublin city centre during lockdown. PHOTO: GARETH CHANEY/COLLINS

Construction activity surged in June as sites opened again after the lockdown, according to figures published this morning.

The Ulster Bank Construction Purchasing Managers' Index (PMI) soared to 51.9 last month from just 19.9 in May. Any reading above 50 signals expansion, and any figure below, contraction.

The reading in June is the first time in four months that the sector recorded growth.

Housing construction activity saw the strongest surge in June as builders rushed back to sites. The reading for the market segment was 55.8, compared with 21.4 in May.

For commercial construction, the reading last month just tipped into expansion, at 50.9.

For civil engineering, activity continued to contract, but at a slower pace than previously. Its reading in June was 43.4, compared to 14.9 in May.

"Overall, the June PMI is an encouraging sign that the construction sector is now more clearly in recovery mode following the easing of restrictions which took hold during May," said Ulster Bank's chief economist for Ireland, Simon Barry.

"Furthermore, a headline reading of 51.9 also signals construction outperformance relative to both the services and manufacturing equivalents, which stand at 39.7 and 51 respectively," he added.

Mr Barry also noted that construction firms' hiring and ordering activity had also improved in June, even though it remained in contraction.

"While new business and employment both remained in contraction territory in June, we wouldn't be surprised if these indicators return to outright expansion in the months ahead as confidence among construction firms about the coming year also continues to rise," he said.

The economist pointed out that 39pc of construction firms that responded to the latest Ulster Bank survey said they anticipate higher output levels in the next 12 months. In March, just 17pc expected an increase.

The survey also noted that efforts to secure construction materials were hampered by continuing issues in supply chains to the impact of the Covid pandemic.

"Shortages of some inputs, reduced capacity at vendors and delays from UK suppliers all contributed to a steep lengthening of delivery times," it said.

Input costs also rose sharply last month, following a previous increase recorded in May. 

Irish Independent