Sunday 18 August 2019

Building sector sees slowdown in growth

 

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John Mulligan

John Mulligan

The rapid expansion of the construction sector following the downturn has firmly cooled, with new figures this morning pointing to a slowdown in the pace of home building.

Ulster Bank's latest Construction Purchasing Managers' Index, which tracks activity and the outlook in the sector here, slipped to a reading of 51.4 in July from 53.1 in June.

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Any figure above 50 indicates expansion, while below 50 points to contraction.

And while the sector is still expanding, it did so last month at the slowest pace in the past 71 months.

Although housing construction remained in growth mode in July, the index reading for that particular sector fell to 55.9 from 58.4 in June.

Commercial activity - the construction of facilities such as offices and warehouses - rose to 54.7 in July from 52.8 in June.

But with vital infrastructure such as roads and rail still far below what's required in the burgeoning economy, civil engineering activity continued to severely contract last month, with a reading of just 40.5. That compared to 42.3 in June.

Simon Barry, the chief economist for the Republic of Ireland at Ulster Bank, said that the pace of activity in the construction sector last month was at its lowest level in almost six years.

"Optimism levels have continued to slip back from previous highs, with the future activity index declining to its lowest level in over six years amid some reports that Brexit is having a negative impact on the outlook," he said.

Construction employment growth was at its lowest level in July since March 2015.

Irish Independent

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