The latest construction PMI (purchasing managers' index) shows the highest monthly rise in the index in September since the series began in June 2000. However journalists and others are confused by this type of survey.
1) What the survey results suggests is that there has been an apparent rise in house building activity relative to the holiday month of August and the actual monthly percentage rise in positive responses is the highest since June 2000 2) the output in the months of the peak bubble year of 2006 of course are way above the current level 2) the current panel numbers are not disclosed as the sample is likely small. So comparing the post crash market based on this post crash sample with a market that was in a bubble for most of a decade is invalid.
Se more here on PMIs: The idiot/ eejit's guide to distorted Irish national economic data
Simon Barry, chief economist Republic of Ireland at Ulster Bank, noted that: “The recovery in Irish construction continues to gain strength, according to the results of the latest Ulster Bank Construction PMI survey. The overall PMI index for the sector was broadly unchanged at 61.5 in September, as activity posted another month of rapid expansion. Total activity has now recorded increases in each of the past thirteen months. Of particular note in the latest results is the fastest rise in housing activity in the survey’s fourteen-year history – an encouraging sign that sustained, and badly-needed, increases in residential activity are now taking hold. The latest results also point to further sizeable advances in Commercial activity, albeit that the pace of increase eased a
The rise in total activity was partly driven by strong growth in activity on housing projects. Residential activity increased at the fastest pace since data were first collected in June 2000. Commercial activity also rose at a sharp pace in September, albeit the weakest in three months. On the other hand, civil engineering activity continued to decrease, and at a faster pace.
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