Friday 24 May 2019

Building growth continues as optimism picks up

Positive figures: Ulster Bank’s Simon Barry
Positive figures: Ulster Bank’s Simon Barry

David Chance

Construction activity showed strong growth in April and optimism over future prospects picked up, according to the latest Ulster Bank Construction Purchasing Managers' Index released today.

The overall index rose to 56.6 in April, up from 55.9 in March, signalling a sharp expansion of construction activity.

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The reading marked the 68th consecutive month of greater construction activity, the bank said. The expansion in purchasing activity was the fastest since June 2018.

"The headline PMI index rose modestly last month, consistent with an acceleration in the pace of overall activity growth from what was already a very solid pace in March," said Simon Barry, chief economist for Ireland at the bank.

"Furthermore, housing activity was again the strongest performing sub-sector as growth in residential activity continues to show welcome signs of rapid expansion, at similar rates to those reported in 2018," he said.

Housing recorded a reading of 60.8, up from 60.5 in March, while commercial rose to 55.5 from 54.6.

Strong growth in construction-related job creation has helped push the unemployment rate down to 5.4pc, although the survey noted that employment growth ieased slightly during April. "Despite this, the rate of job creation was sharp and quicker than the long-run series average. Anecdotal evidence from panellists indicated that extra staff had been hired in order to keep up with customer demand," Mr Barry said.

There were, however, signs that nervousness over Brexit had an impact on building, the survey showed.

It said there were some reports that ongoing Brexit uncertainty was weighing negatively on customers and that some firms had raised their input purchases in order to mitigate any supply disruptions resulting from the departure of the UK from the European Union.

Despite the continued impasse over Brexit, more than 40pc of companies expected activity to increase over the coming year.

Irish Independent

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