A new survey shows that the rate of contraction in the construction industry continued to ease from the sharp falls seen at the end of 2010, but output still fell last month.
The Ulster Bank Construction purchasing managers' index rose to 47.8 in February from 45.3 in January. Ulster Bank says that although the latest reduction was the weakest in six months, it was still the 45th monthly fall in activity in a row. Any figure under 50 signals contraction.
New business and employment both fell at sharper rates as demand in the industry remained subdued.
The survey looks at three sectors - civil engineering, housing and commercial. Building levels fell across all three sectors, with civil engineering posting the biggest reduction. The residential sector saw a marginal contraction that was the smallest since November 2006.
The survey shows that new orders fell at a solid pace last month with companies reporting strong competition for the scarce new business. Employment levels also fell sharply in February as companies continued to cut jobs in line with their reduced workloads.
Input prices rose substantially in February, Ulster Bank says, and at the steepest rate in ten months. Higher commodity prices was the main reason for this, with copper, fuel and steel prices all rising.
However, building firms expect activity to be higher in 12 months time than the current low levels.
'While the housing index is edging closer to the 50 mark that separates contraction from expansion, civil engineering remains a particular weak spot,' commented Ulster Bank's economist Lynsey Clemenger.
'Indeed, the latter is likely to continue to underperform given the ongoing entrenchment in government capital spending', she added.
