Today's PMI (purchasing managers index) data on the Irish construction sector that is produced by Markit, the London index firm for Ulster Bank, shows another sharp expansion in August, with activity increasing in each month throughout the past year and confidence at a near-record high - - however, this data is unusual as there is neither information on the response rate or the number of panel firms and we assume that it's a small number.
Last week in respect of manufacturing PMI, many journalists confused comparative monthly performance and confidence or sentiment levels with activity.
Today's report says growth was supported by another steep rise in new orders, and companies were strongly optimistic that activity will continue to increase over the coming year. Meanwhile, the rate of input cost inflation quickened to the sharpest since March 2012. The Ulster Bank PMI registered at 61.4 in August, down slightly from the reading of 62.6 in July but still signalling a strong increase in activity at construction firms in Ireland.
Total activity has now risen in each of the past 12 months. Growth of new work was reportedly the key factor leading activity to rise.
Strong growth in housing and commercial activity: Construction firms recorded sharp increases in activity on both housing and commercial projects during the month, despite the rates of expansion easing slightly.
In contrast, civil engineering activity continued to fall, albeit at only a modest pace.
New orders rise sharply: Improving conditions in the construction sector led to an increase in new work during August. New business has now risen in each of the past 14 months, with the rate of expansion remaining substantial.
Near-record sentiment recorded: Sentiment among Irish construction firms reached a near-record high in August as optimism improved for the third month running. Panellists forecast that ongoing improvements in economic conditions in Ireland and within the construction sector itself would help lead to higher activity.
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