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| Source: NTC Economics |
Irish Construction PMI - Although the highest for four months, at 36.6, the Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to measure the overall performance of the construction economy – still indicated a substantial deterioration in business conditions in the Irish construction sector. The PMI has only registered a lower reading on three other occasions (the past three months) in the entire survey history (which began in June 2000).
Commenting on the survey, Pat McArdle, Chief Economist at Ulster Bank, noted that: “Signs last month that there was some levelling off in the rate of decline in construction activity were again evident in March, when all three sub-components posted slightly higher numbers. However, the numbers remained below 50, indicating that activity in March was down significantly on last month, in particular in the case of housing and civil. The rate of decline in construction employment accelerated to a survey high. Employment has fallen sharply since last Autumn, but has yet to show up in the official CSO QNHS (Quarterly National Household Survey) data. We expect the Q1 QNHS data to show a significant decline in construction employment.”
Activity continued to fall in all three monitored construction areas
Housing remained the worst performing of the three featured construction areas in March. The rate of contraction of housing activity remained rapid, albeit the weakest since September 2007. Civil engineering activity fell sharply, while commercial declined solidly, although both contracted at weaker rates than in the previous month.
New orders fell for twelfth successive month
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| According to the CSO (Central Statistics Office), there were 126,100 employed in Irish Construction in March/May 1998. In the same period in 2007, the total was 280,300 - up by 122%. In the same period, Health employment increased by 100,000; Education added 48,000; Industry fell 10,000; Agriculture fell by 21,000; Financial and Other Business Services increased by 110,000; Wholesale and Retail Trade added 82,000.
Irish full-time employment in manufacturing and internationally traded servicesfell 10,297 from 315,418 in 2000 to 305,121 in 2007 while the total workforce expanded by 605,000 in sectors such as construction, public services, distribution, retail and other services. |
New orders continued to fall sharply at Irish constructors in March, with around 40% of firms recording a decline. Panellists suggested that lower new business volumes reflected worsening demand
for construction in general. A contraction of new orders has now been signalled in each month of the past year.
Employment declined at record rate
Data for March signalled a survey record contraction of staffing levels at Irish construction companies.
Employment declined at a substantial pace as firms adjusted to reduced workloads. Employee numbers have now fallen for eleven months in a row.
Input costs increased, but at only a moderate rate
Prices paid for inputs increased moderately as firms reported higher fuel and raw material costs. However, the rate of cost inflation was well below the average for the past year.
Firms in the Irish construction sector registered a further substantial decline in input buying in March as they utilised existing stocks and responded to falling activity requirements. The rate of contraction of
purchasing was only marginally weaker than January’s survey record.
Constructors were modestly optimistic in March
Construction firms were modestly optimistic regarding the outlook for activity growth. However, in some cases, the expectation of higher activity was based on the view that it was unlikely to fall much further.
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| Source: NTC Economics |
