Construction activity and employment vacancies continued to rise in December, according to two separate surveys released over the weekend. However, there were mixed signals in relation to employment in the construction industry.
The Ulster Bank Construction Purchasing Managers' Index (PMI), released today, shows overall performance in the industry rising from 58.2 to 59.1, indicating an acceleration of activity in the sector.
The construction sector employs a quarter of a million people, over 12 per cent of the labour force. The Bank of Ireland survey of employment vacancies suggests that employment creation remains strong in the rest of the economy as well.
"The construction industry seems to have ended 2005 on the boil with all three sub-sectors recording readings around the 60 mark, indicating very strong expansion indeed. However, the overall average for the year was slightly below the exceptional 2004 performance," according to Ulster Bank chief economist Pat McArdle. Growth in construction activity was strongest in the housing sub-sector, but commercial and civil engineering activity rose also, due to orders for new office buildings as well as increased work on transport infrastructure provision.
Employment in construction rose for the 28th month in succession as the rate of job creation in the sector reached a six-month high, according to the survey findings. The purchase of inputs also increased, putting pressure on suppliers, while increases in oil prices are continuing to filter through into rising industry costs, although rates of increase have recently stabilised.
The survey also found that strike action had affected the delivery times of suppliers.
According to the Bank of Ireland Business Banking review of the jobs market, the number of recruitment advertisements placed in national daily and Sunday newspapers in 2005 was 2 per cent higher than in 2004 and 11 per cent higher than in 2003.
"Labour is now a scarce resource in Ireland, with the economy operating at full employment against a backdrop of buoyant labour demand," said Bank of Ireland chief economist Dr Dan McLaughlin.
The highest sectoral demand was recorded in the professional sector, with advertisements rising by 14 per cent on the previous year.
A significant increase in vacancies, 8 per cent, was also recorded in the retail sector. But the Bank of Ireland survey findings also suggest that vacancies in the construction sector have fallen by 10 per cent.
The survey also recorded a 10 per cent fall in manufacturing vacancies. Cork registered the highest demand for labour, accounting for more than half of the advertisements placed in regional newspapers.
"Employers are facing difficulties in filling vacancies, which could have a knock-on effect for the economy. With a monthly rate of 11,000 new PPS numbers being issued, immigration is one solution to this challenge," said director of Bank of Ireland Business Banking, Cathal Muckian.
There is a need for a co-ordinated immigration strategy to ensure the country has a sufficient inflow of workers to sustain our economic growth," Mr Muckian added.
