House-building activity grew at its fastest rate in at least 14 years last month. According to the Ulster Bank Construction Purchasing Managers' index, the pace of new homes being built was the fastest since the bank began the index in 2000. The overall index climbed for the 13th month in a row in September, but that was only a bit higher than in August. But in detail the house-building sector jumped sharply.
News that the house-building sector is seen as growing rapidly will be especially welcome given the ongoing concerns about the shortage of suitable houses and apartments, especially in Dublin. Meanwhile, commercial activity also rose at a sharp pace in September, but the weakest in three months. And activity in civil engineering projects continued to decrease, and at a faster pace.
Ulster Bank economist Simon Barry says today's index shows that the sector continues its recovery and that recovery continues to gain strength. Mr Barry says the construction sector's near term prospects also remain favourable and this is evident by the fact that companies continue to add to their staffing levels to deal with the increased demand. He noted that construction companies increased their workforces for the 13th month in a row in September.
Today's index also shows that the availability of sub-contractors declined to the greatest extent for 14 years last month. Ulster Bank said that shortages in the supply of sub-contractors enabled them to raise their rates at the strongest pace since September 2004. Mr Barry said this suggests there is some element of a sector struggling to keep up with the pace of change. But despite the improvements, the economist says that we have to be mindful of the fact that the rate of house building last year is as low as the 1970s. He says that while the recovery is welcome, there is some way to go before house supply is on a par with the demand for new homes.
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MORNING BRIEFS - China's exports and imports rose well above market expectations in September, as its trade surplus more than doubled, new data showed today. Exports were up 15.3% from the previous year, while imports rose 7% in the same period. Analysts had expected much lower numbers. Trade surplus in the world's second biggest economy also more than doubled to $31 billion. The big improvement in September's trade activity, which has been sluggish most of this year, was unexpected as China's economy faced challenges this year. Weak factory activity and slowing domestic demand from a cooling housing market had led Beijing to repeatedly warn that China could miss its economic growth target of 7.5% this year.
*** The Bord Gáis Energy Index rose 3% last month as wholesale natural gas and electricity prices increased month-on-month. These increases were offset by a 5% fall in Brent crude oil prices as a new wave of oil supply from the US is flooding the market amid weak demand. Bord Gáis says the increase in wholesale UK natural gas and Irish electricity prices came about because of the UK gas system being undersupplied throughout the month. Higher wholesale gas prices in turn pushed Irish wholesale electricity prices higher as imported UK gas is used to produce the majority of Ireland's electricity.
