Growth in the Irish construction sector remained elevated in November as activity, new orders and employment all witnessed sharp increases. Furthermore, business sentiment reached a new record high amid optimism surrounding the Irish economy. The Ulster Bank Construction Purchasing Managers’ Index® (PMI®) registered at 63.5 in November, down from 64.9 in October but still signalling a substantial increase in construction activity in Ireland (activity has now risen in each of the past 15 months).
“November was another strong month for the Irish construction sector, according to the latest results of the Ulster Bank Construction PMI survey,” said Simon Barry, Chief Economist Republic of Ireland at Ulster Bank. “Activity continued to expand at a very solid rate last month, though at a slightly slower pace than in October. This brings the run of monthly activity gains to fifteen as the sector’s recovery continues to gain traction, albeit from the very depressed levels reached during the downturn.”
“Activity trends are being underpinned by substantial increases in new business flows, with companies attributing the latest expansion to general improvements in the construction market and stronger economic confidence,” Barry continued. “Indeed, overall optimism among Irish construction firms improved sharply in November in reaching a new record high for the survey which began in June 2000. Almost three in four firms expect activity to increase over the coming year, reflecting perceptions that the broader economic environment is set to continue to improve.”
Survey highlights
- Sub-sector breakdown: for the second month running, all three categories of construction saw rises in activity. The sharpest expansion was on commercial projects, closely followed by housing. Meanwhile, the rate of expansion in civil engineering activity quickened sharply during the month and was the fastest for eight years.
- New orders: the increase in activity was mainly linked to higher new business. It was also reported that confidence in the wider economy and improvements in the construction sector had led new orders to rise. The latest expansion in new business was substantial, and extended the current sequence of growth to 17 months.
- Record optimism: strong confidence was signalled by series-record optimism at construction firms in November. Sentiment improved markedly during the month and surpassed the previous record seen in April. Panellists indicated that the wider Irish economy is expected to strengthen further over the coming year, leading to further opportunities for growth.
Adapted from press release by Rosalie Starling