Friday 15 December 2017

Construction growth slows in September

Ulster Bank Republic of Ireland chief economist Simon Barry
Ulster Bank Republic of Ireland chief economist Simon Barry

Paul O'Donoghue

The growth in Ireland's construction industry activity slowed down during September, although the sector did continue to expand.

The Ulster Bank Construction Purchasing Managers' Index, a seasonally adjusted index designed to track changes in total construction activity, dropped from 56.5 in August to 55.8 in September.

This was the lowest reading since March. However, the reading was still well above the 50-point mark that indicates growth and pointed to an increase in construction activity during the month.

Output has now risen in each of the past 25 months.

Ulster Bank Republic of Ireland chief economist Simon Barry said that the reading indicates that companies continue to report "widespread expansion" during the month.

"The construction sector continued to experience solid, though slightly slower, growth in September," he said. "Indeed, all three major sub-sectors - housing, commercial and civil engineering - registered growth in September. [This was] the first time since June that across-the-board gains in activity were recorded by survey respondents.

"Gains in actual and prospective activity continue to underpin rising demand for labour within the sector."

However, he added that the drop in headline PMI is something that should be monitored.

"While the overall story remains one of continuing construction sector expansion, the fall in the September headline PMI index represented the third consecutive monthly decline," he said. "That pattern suggests that momentum behind the recovery slipped a little through the third quarter - a trend that bears watching in the months ahead."

Irish Independent

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