The latest monthly barometer of the construction industry shows that activity and employment fell again in October.
The Ulster Bank Construction Purchasing Managers index rose only slightly last month to 34.5 from 34.2 in September. Activity has now contracted every month since June 2007. The monthly fall reflected a further decline in new business, Ulster Bank said.
All three sectors monitored by the survey continued to see record falling activity, led by civil engineering. Activity on these projects has now fallen in each of the last 23 months.
The survey shows that the rate of decline in commercial activity accelerated over the month to its fastest in five months. Housing activity fell at the slowest pace of the three categories by the pace of reduction was still considerable, the bank said.
The survey says that 'fragile confidence' among clients was the main cause of the latest substantial drop in new orders. Intense competition also meant that available tenders were increasingly hard to win.
Firms involved in the building industry also continued to make job cuts, although employment declined at a marginally weaker pace in October. Ulster Bank says that lower staffing levels were mainly due to falling new orders as well as attempts to cut costs.
Lower workloads led firms to reduce their purchases of building materials in October and the bank said the latest fall was the sharpest since May. Input costs decreased at the slowest pace in a year last month.
Ulster Bank says the level of optimism regarding future prospects for activity remained weak last month. Almost one third of respondents expect activity to be better in a year's time, with economic conditions and liquidity forecast to improve, while around 31% expect further falls in activity due to the continued fragility of the wider economy.
Ulster Bank's chief economist Simon Barry says the survey confirms that conditions in the Irish construction sector remain 'highly challenging'.
'The improving trend that has been evident earlier in the year looks to have stalled. This stands in contrast to the ongoing improvement which has been maintained in equivalent surveys of manufacturing and services,' he adds.
New home registrations fall by 31%
Separate figures show that the number of new homes registered in October fell by almost 31% compared with the same month last year. This is according to figures from home guarantee scheme Homebond. It said just 355 homes were registered in the month, compared with 514 a year earlier. The October figure was up, however, from the 212 recorded in September this year.
The Homebond figures are seen as an indicator of future housing activity. Homebond is the bigger of two companies which provide registration figures, the other being Premier. The Homebond figures show that no homes at all were registered in seven counties during the month.
