Irish Construction PMI: "Fastest rise in new orders since 2004"; Activity very low
By Finfacts Team
Aug 11, 2014 - 7:37 AM

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The monthly Irish Construction PMI reports shows that the rate of growth in new business quickened sharply to the strongest since November 2004 and the pace of job creation picked up. This however is a misleading claim.

The Ulster Bank Construction purchasing managers’ index (PMI) - - a seasonally adjusted index designed to track changes in total construction activity - - rose to 62.6 in July from 59.9 in the previous month and signalled the fastest rise in activity in three months. Total activity has now increased in each of the past 11 months with panellists linking the latest rise to higher new orders, and in some cases the release of projects that had previously been on hold.

The headline is misleading as the number of firms polled, which is not disclosed, is likely to be a fraction of the 2004 level.

The PMI measures sentiment and  Simon Barry, chief economist Republic of Ireland at Ulster Bank, commented that: "It is important to recognise that levels of residential activity remain extremely low following the huge correction which took place over 2007-2013. Nonetheless, the evidence provided by the PMI – and indeed other data sources, including Department of Environment figures on house completions – indicates that housing activity trends are clearly on an improving trajectory.”

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