Irish construction output continued to slow in April according to latest figures from the Ulster Bank Construction Purchasing Managers’ Index PMI.
April dropped to 56.4 from March’s figure of 62.3. Although above the threshold of growth, this was the second consecutive month showing a reduction in growth and was the weakest since November 2015.
Readings above 50 are an indication of growth on the previous month.
A slowdown across the three categories of construction covered by the survey was recorded. The best performing sector was housing, followed closely by work on commercial projects. Civil engineering activity saw only moderate growth and was the worst performing sector.
A rise in new orders of work was reported for the thirty-fourth consecutive month but at a slower rate than previous months.
There was also a slower rate seen in employment but was still high with the signing of new contracts leading to firms increasing staffing levels.
The use of sub contractors fell for the first time in 14 months but their availability still fell at a steep rate.
Irish construction companies also reported a sharp increase in purchasing activity due to the high number of new orders.
More two than thirds of companies said that they expected to see business increase in the coming year. The level of optimism in April was second highest in the series history, behind November 2014’s record.
This wave of positivity would appear to be supported by improving economic conditions and higher new business.
Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, noted that: “Irish construction activity continues to grow at a solid, albeit slower, pace according to the latest results of the Ulster Bank Construction PMI. The headline PMI index declined markedly for the second month in a row to leave it at 56.4 in April – its lowest level since last November. It was a similar story in the details beneath the headline figure, with slower rises in activity also recorded in each of the major sub-sectors of Housing, Commercial and Civil Engineering.
“However, these declines need to be seen in the context of the exceptional strength recorded earlier in the year which saw the main PMI as well as the Housing sub-index establish new record highs in February. So while this slippage in momentum bears careful monitoring in the months ahead, it is important to note that these results are still very much consistent with a sector comfortably in expansion territory. Indeed, construction firms remain distinctly upbeat about the sector’s prospects. Sentiment in April rose to its second-highest level in the survey’s history as more than two-thirds of respondents anticipate further gains in activity in the coming twelve months.”