Construction sector still in decline as job cuts speed up
THE construction sector continues to suffer sharp declines, with the rate of job cuts in May the fastest so far this year.
The embattled sector remained deep in contraction during May, with further sharp declines in activity and new orders recorded, according to the latest Ulster Bank Purchasing Managers' Index.
Last month's contraction extended the current sequence of monthly declines to six years. The index posted 42 last month, broadly in line with the reading of 41.9 the previous month.
Simon Barry, Ulster Bank's chief economist in the Republic, said the index pointed to sharp, ongoing declines in activity.
"Survey respondents continue to cite a lack of demand and strong competition as key head winds, and the result was a 17th consecutive fall in new orders – a trend which continues to exert downward pressure on staffing levels," Mr Barry said.
"Indeed, the pace of job-shedding in May was the fastest so far this year and is clear evidence that a bottoming out of activity remains elusive."
Civil engineering was the worst performing sector, and was the only one to see a sharper reduction in activity last month than in April.
New orders decreased for a 17th successive month in May, with panellists reporting a lack of demand and strong competition for tenders.
And the further drop in new business had a knock-on effect on staffing, with the rate of job cuts quickening to its fastest in May so far this year.
A separate study – the National Housing Construction Index, compiled by Dundalk-based company Link2Plans – shows that while planning applications are down 7pc on the previous year, commencements are down by 15pc.
The drop was blamed on bad weather scuppering efforts to start building work.
Yet Dublin had an increase in planning applications of 10pc, along with seven other counties. Kildare (28pc), Monaghan (19pc) and Leitrim (19pc) saw the biggest rises.
Four counties measured an increase in the number of commencements – among these was Dublin with a 22pc rise.