Construction industry sees sharpest increase in new business for seven months

Monday 08 February 2016 11.15
Ulster Bank's Construction PMI jumped to 63.6 in January from 58.6 in December
Ulster Bank's Construction PMI jumped to 63.6 in January from 58.6 in December

The construction industry recorded a strong pick up in activity in January, according to the latest Purchasing Managers Index from Ulster Bank.

Ulster Bank's Construction PMI - which tracks changes in total construction activity - jumped to 63.6 in January from 58.6 in December. A figure over 50 signals growth in the sector, while under 50 signals contraction.

Ulster Bank noted that this was the second successive acceleration in the rate of growth, with the latest expansion the fastest since June last year. 

Total activity in the sector has now increased in each of the past 29 months.

New business increased at its sharpest pace in seven months, with housing, commercial and civil engineering all seeing a pick up in activity.

The biggest increase in activity in January was seen in housing projects, where the rate of growth was the sharpest since October 2014. 

Rates of expansion in the commercial and civil engineering sectors were the fastest in seven and 13 months respectively, today's index also shows.

As a result of the continued expansion, construction firms took on more staff and increased their purchasing activity. Sentiment within the sector also remained strong.

However input costs have continued to rise - albeit at a slower pace than was seen in late 2015.

"Overall, the strong construction PMI figures mirror the encouraging signals sent from the other Irish PMI surveys for January, particularly the services equivalent which jumped to its highest level in over nine and a half years," commented Ulster Bank's senior economist Simon Barry.  

"So while there are some prominent downside risks facing the outlook for the global economy at present, several important areas of the domestic economy in Ireland look to be carrying considerable momentum into the early months of 2016," the economist added.