Construction activity in Ireland rose for the 25th successive month in September, according to the Ulster Bank Construction Purchasing Managers index. Despite slipping from August's seven month high to 59.9, the index remained well above the critical no-change value of 50 to indicate a marked expansion of the construction industry here.
Ulster Bank said that with commercial construction rising at its fastest rate since last July, the commercial area remained the best performing sub-sector of the Irish construction industry for the third successive month in September.
While civil engineering activity rose at its sharpest pace in nine months, growth of the housing sub-sector eased to a 25 month low and recorded the weakest growth of the three board construction areas in September.
'After a very strong August bounce, it is not surprising that the construction industry reported a more subdued September, as costs rose sharply, new orders eased back and confidence hit a 22 month low,' commented Ulster Bank's Chief Economist Pat McArdle.
He said that civil engineering has finally moved into positive territory but with only three months left in 2005, it has a lot of catching up to do. Overall, it looks like this sector will be weaker than it was last year, he added.
'With housing reports somewhat erratic, the running is being made by commercial construction, which is booming after a few weak years, thereby ensuring that the industry as a whole is having another good year,' he said.
Irish builders' average new order books expanded for the 25th month in a row last month, while further firms also recruited more workers in September.
However, driven by rising oil prices, the rate of input cost inflation reached a 14 month high in September. The bank said that average input prices have now risen month-on-month for almost two years.
Although their degree of optimism eased to a 22 month low last month, Irish builders remained on average upbeat regarding future growth prospects. Many linked their optimism to the continued growth of new business.
