THERE WAS a further deterioration in conditions in the construction sector in April, according to new data.
Both new business and employment fell at faster rates, while overall activity continued to contract substantially, the latest results from the Ulster Bank construction purchasing managers’ index showed.
The index posted 42.5 in April, with anything below 50 indicating a contraction.
The pace of reduction in input costs slowed markedly during the month. Activity at Irish construction companies has now decreased in each of the past 35 months.
Simon Barry, chief economist with Ulster Bank in the Republic, said the index had risen in each of the first four months of this year and now stood at its highest level in two and a half years. “This points to an easing in the rate of contraction in construction output in recent months,” he said.
He said the figures meant the construction sector was the clear laggard in terms of sectoral recovery, with the services and manufacturing indices indicating a return to positive growth in the past number of months.
In the North, the latest Ulster Bank purchasing managers’ index showed firms were still struggling as private sector activity continued to fall in April, despite indications that the recession was over.
It marks the fifth successive month that the index has tracked a downturn in private sector activity. The latest research also confirms there has been further falls in new business.
Although the pace of decline has slowed, the decrease in demand for new orders suggests the slowdown will not be reversed in the short term.
The broad-based downturn in the private sector has been a reoccurring factor since the beginning of the year in Northern Ireland.
But the fact that it is now coupled with reduced public spending has served to accentuate fears that a potential double dip recessionary downturn could be around the corner.
Richard Ramsey, Ulster Bank’s chief economist in Northern Ireland, said a key theme in recent surveys has been the divergence in economic performance between the North and the rest of the UK. He said Northern Ireland is currently the only region of the UK still reporting both falling levels of output and employment.
