Activity in the Irish construction sector fell further last month, according to the latest construction purchasing managers index from Ulster Bank. The index stood at 43.5 in August, up from 42.1 in July. But any figure under 50 signals contraction in the sector.
Ulster Bank says the pace of contraction was the slowest in four months, while the rate of decline was still sharp. Activity has fallen each month since June 2007.
The index shows that the economic climate weighed on the sector and that as well as the fall in activity, declines were also recorded in new orders, employment and purchasing activity.
Of the various sectors the bank looks at, the civil engineering sector recorded the steepest fall in activity. Activity on housing projects fell at a faster pace than in July, and was the weakest sector overall.
Business sentiment in the construction sector fell to its lowest level in six months, but firms still expect activity to be higher in 12 months' time than current low levels.
'' The construction sector continues to face a challenging outlook in the near term, as it is weighed down by the lack of new business,'' commented Ulster bank economist John Fahey
''Given that activity levels are still extremely low, employment in the construction sector continued to decline, as it has done in every month since May 2007, although the pace of contraction has slowed for a sixth straight month,'' he added.
