The Irish construction sector maintained its recent run of strong growth in activity at the end of 2014 from a very low base.
New orders also continued to expand sharply, albeit at a weaker pace, while companies took on extra staff at a rapid rate. The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – remained well above the 50.0 no-change mark in December, posting 63.1, down slightly from 63.5 in November.
This signalled a further strong monthly increase in activity, albeit the slowest in three months. The average reading for 2014 as a whole was the highest since the series began in mid-2000.
Commenting on the survey, Simon Barry, chief economist Republic of Ireland at Ulster Bank, noted that: “The results of December’s Ulster Bank Construction PMI survey confirm that activity trends in Irish construction remained robust as 2014 drew to a close. The headline PMI reading of 63.1 indicates that
activity once again rose strongly last month, albeit at a slightly slower pace than in November.
Respondents continue to report a broad-based recovery across the sector. While the indices for housing and commercial activity declined in December, they both remained at very elevated levels, and civil engineering activity increased at its fastest pace in eight years.
Housing activity increases sharply: Where activity increased, this was linked to rising new business, with the housing sector mentioned as a source of growth by some companies. Residential activity continued to rise sharply despite the pace of expansion slowing for the third month running. The
fastest rise of the three categories of construction was on commercial activity. Meanwhile, civil engineering activity increased for the third month running, and at the steepest pace since October 2006 - this shouldn't be confused with the level of activity in the peak year of the property bubble.
The current firm panel size is likely small as it is not disclosed.