Irish Construction: The construction sector moved closer to
stabilisation in August amid further growth of new business. The sample here is
likely to have been small as it hasn't been disclosed by Markit.
While employment and purchasing activity continued to fall, rates of decline
eased in each case and business optimism improved to the strongest since January
2007. Meanwhile, input prices decreased for the first time in just over a year.
The Ulster Bank Construction Purchasing Managers’ Index (PMI) - - a seasonally
adjusted index designed to track changes in total construction activity - - rose
for the fourth consecutive month in August, posting 49.7 from 47.5 in July. The
reading signalled a marginal fall in construction activity that was the slowest
in 20 months.
Simon Barry, chief economist Republic of Ireland at Ulster Bank,
said:: “The August results of the Ulster Bank Construction PMI survey offered further
encouragement on trends in the Irish construction sector, which continues to show signs of
stabilising. Most notably, the New Orders index posted another above-50 reading last month, thus pointing to a
second consecutive monthly rise in new business levels. And the improvements in orders have now
begun to foster increases in activity levels in both the Housing and Commercial sub-sectors –
the first time in almost six years that two areas of the construction sector have experienced rising
activity in the same month.
“The overall PMI index also increased last month, though remained just
slightly below 50, reflecting ongoing activity declines reported by firms operating in Civil Engineering. But
at 49.7, the headline PMI index is itself within touching distance of the stabilisation point of 50 – a
milestone which looks set to be reached in the coming months, given the improvement in new business patterns.
Overall, the improved trends in several areas of the Construction PMI chime with other indicators on
the sector, including house completions and employment, which together suggest that the Irish
construction sector is finally beginning to emerge from a six-year slump in activity.”
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