Construction growth eased for a third straight month in May amid a dip in business confidence, according to Ulster Bank. A second survey released at the weekend, by PricewaterhouseCoopers (PwC), has found almost half of Irish construction leaders said their business would be hit if the UK exited the EU following this month's Brexit referendum.
It comes as British opinion polls over the weekend showed the outcome of a referendum on the matter in 10 days is too close to call.
The Ulster Bank construction purchasing managers index fell to 55.9 in May from 56.4 in April. However, it remained above the key 50 level that signals that activity expanded for the 33rd consecutive month. The growth rate was the slowest since last November, as expansion in housing activity and new orders eased and business confidence dropped.
"On the other hand, there were positive signs from a faster rise in commercial activity, while construction firms were in a position to up their rate of job-creation slightly," said Simon Barry, an economist with Ulster Bank. "The overall picture is one of solid improvements, albeit with less spectacular rates of growth than were seen in the first quarter of the year."
The PwC report said more than two-thirds of industry leaders surveyed planned to hire this year, with half aiming to increase their workforce by more than 10 per cent.
Boom
The latest Central Statistics Office figures show that 131,300 people were working in construction in the first quarter, or 6.6 per cent of the total workforce in the State. While that marked a 28 per cent increase over two years, the percentage of the workforce involved in construction is still less than half the level of 2007, at the height of the boom.
PwC said its survey found that construction employers had an “acute problem” finding the right types of staff, particularly with managerial and planning and feasibility expertise. Some 65 per cent said they were experiencing difficulties hiring people with specific skills, up from 45 per cent a year ago.
"While some challenges are easing up, factors holding it back are the skills gap, available finance and for those who are exporting, external uncertainties such as the possible impact of the upcoming vote on a British withdrawal from the European Union, " said Ronan Mac Nioclais, a real estate partner with PwC in Dublin. "While Ireland's construction industry is in expansionary mode with positive plans for growth, revenue expectations are somewhat less than last year," he said.
With almost half of construction industry leaders saying their business would be hit by a Brexit, 71 per cent said it would create uncertainty over investment decisions, while 38 per cent said their sales from UK projects would be hit. Others said it would affect their UK suppliers and create more barriers for doing business.
However, some said they would expect demand for office space to increase in Dublin, as they saw more multinationals locating in Ireland – albeit thus increasing pressure on housing.
