Irish construction growth eases from ‘extremely elevated’ levels in May

Expansion of activity in the Irish construction sector eased in June from "extremely elevated" levels recorded in the previous month, according to Ulster Bank,

The Ulster Bank construction purchasing managers’ index (PMI) dipped to 58.4 in June from 61.8 in May, with total activity in the sector having risen in each of the past 58 months. A reading above 50 per cent indicates expansion in the sector.

"The latest results, as well as anecdotes from survey respondents, continue to highlight that housing and commercial remain areas of particular strength within the sector, albeit that there was some cooling of growth in June from the exceptionally rapid rates recorded in May," said Simon Barry, Ulster Bank's chief economist for the Republic.

“Other elements of the survey also point to a very positive picture, with the pact of job-creation quickening further while new businesses also rose at a very rapid rate.”

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The index reading for housing activity dipped on the month to 60.4 from 65.2, while commercial activity declined to 62.0 from 65.6, according to Ulster Bank.

Employment increased again in June, extending the current sequence of job creation to 58 months. Moreover, the pace at which staffing levels rose was faster than in the previous month, with respondents to the latest monthly survey indicating that increased demand led them to take on extra staff.

Confidence among construction firms regarding the 12-month outlook for activity dipped to a six-month low in June, but remained elevated. Close to 55 per cent of respondents predict activity to rise over the coming year, reflecting expectations of improving economic conditions and new order growth, according to Ulster Bank.