Housebuilding boosts ‘robust’ construction growth
Construction sector output remained strong in March, and was led by housebuilding for the third month in a row, according to the latest industry figures.
Ulster Bank’s construction industry purchasing managers index (PMI) tracks output and sentiment among hundreds of managers month to month.
The latest PMI reading of 55.9 in March was down from 60.5 in February, and signalled a softer expansion, but growth remains sharp and faster than the long-run series average, according to Ulster Bank chief economist Simon Barry.
The PMI plots activity on a simple gauge either side of 50 – so numbers rising from 50 mark growth and numbers descending from 50 show decline.
“Irish construction firms continue to experience rapid growth in their activity levels,” Mr Barry said.
“A decline in the headline PMI index, from 60.5 to 55.9, indicates that the pace of expansion did ease back in March.
“However, this follows a very strong February performance and the still-robust level of the PMI signals that Irish construction continues to expand at a solid rate.
“Mirroring the pattern of the headline PMI, the sectoral subindices also painted a picture of moderating growth in March, though the housing and commercial indices both remain at levels consistent with ongoing solid activity growth,” he said.
The housing subcategory recorded the fastest rise in activity of the three monitored sub-sectors – commercial activity also increased solidly, but civil engineering activity declined for the seventh consecutive month and at the fastest pace since November 2018 – a sign that infrastructure activity is not keeping pace with overall growth.
The increase in housebuilding appears to be jobs-rich.
Respondents to the PMI survey reported a marked pick-up in the pace of job creation, with the employment index rising to a very elevated reading of 59.6 in March, matching a nine-month high.
Demand for construction workers is being underpinned by new business, which continued to rise solidly during March.
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