Housing demand boosts construction activity in November

Irish construction activity accelerated in November amid a sharp pick-up in housing construction, the latest snapshot of the industry from Ulster Bank shows.

The latest Ulster Bank Construction Purchasing Managers' Index (PMI) said the greater rate of activity stemmed from an increase in customer demand.

“Panellists attributed this to an overall increase in construction work and previously delayed projects starting up,” it said.

The monthly index, which tracks changes in construction activity on a seasonally adjusted basis, rose to 55.5 in November, up from 52.9 the previous month. Construction activity in Ireland has now increased in each of the past 63 months.

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While employment in the Irish construction sector increased during November, the rate of growth moderated from October with some panellists linking it delays in projects.

The recovery in construction employment, which had been decimated in the crash, has been one of the central features of the recent economic turnaround.

Purchasing activity

In line with the trend for activity, input buying increased at a faster pace during November. “The rate of growth was solid and quicker than in October,” the survey said, noting purchasing activity among Irish construction firms has now increased for 57 successive months.

At the same time input price inflation eased to the slowest in two years. Looking forward, sentiment among Irish construction firms also remained strongly positive in November with a number of companies expecting activity to rise over the coming 12 months, due to expectations of greater customer numbers and improving economic conditions.

Commercial construction activity also expanded at a quicker rate that was much faster than the survey average, the survey noted. Civil engineering remains an area of weakness, however, with respondents reporting a third consecutive monthly decline in activity.

“Encouragingly, respondents also reported a marked pick-up in new business flows, with the new orders index rising to a very elevated reading – and five-month high – of 59.1 in November,” he said.

“In turn, strong activity and new orders patterns continue to underpin robust demand for construction workers, though the pace of job creation eased slightly in November,” he said.