Thursday 23 January 2020

Building of houses slows for first time since 2013


(Stock image)
(Stock image)

Shawn Pogatchnik

Housebuilding activity has slowed for the first time since 2013, the latest Ulster Bank construction survey has found.

Its Construction Purchasing Managers' Index (PMI) said the industry's slowdown overall moderated last month.

The headline measure of activity rose to 48.2 from 46.2, moving towards the 50 level that marks the point of growth versus contraction.

But home construction fell below 50 for the first time since June 2013, slumping to 47.7 from 51.3 in October.

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Ulster Bank chief economist Simon Barry cautioned that this signal of contraction in house construction appeared at odds with other indicators. He said the decline was likely to experience "some reversal" in coming months.

"We note that official 'hard' data on residential construction, including housing starts and completions, continue to point to robust growth in the sector," Mr Barry said.

"Indeed, this divergence between the relative strength of 'hard' official measures of economic activity and the relative weakness of survey results is not confined to housing. For example, trends in the official data on manufacturing production have held up well, despite recent weakness in the manufacturing PMI."

He said weakness in the housing PMI figure was "perhaps more reflective of large, adverse moves in business sentiment generally - likely related to acute Brexit uncertainty - than of marked weakness in actual underlying housing activity".

The PMI for commercial construction activity rose into positive territory - to 51.2 from 46.9 - for the first time since July. Civil engineering slumped for the 15th straight month to 36.4 from 41.9.

Irish Independent

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