The construction sector expanded at its fastest pace in five months in November, with strong growth reported in new orders and employment.
The Ulster Bank purchasing managers’ index registered a reading of 56.7 last month, compared with 54.5 in October. It measured activity across housing, commercial property and civil engineering. Simon Barry, the bank’s chief economist, said that growth in the industry “re-accelerated” in November. Housing activity increased most sharply, and it remained the strongest-performing sub-sector for the second month in a row.
Mr Barry said that commercial activity had continued to grow strongly but that civil engineering “remained an area of weakness”. “Survey respondents mentioned that improving economic conditions continue to underpin expansion in both client demand and construction staffing levels,” he said.
“Sentiment about future activity prospects again edged lower in November, falling to its lowest level since August 2013. However, this is best seen as a modest retreat from exceptionally elevated levels as confidence levels remain solidly optimistic, with around half of all firms expecting activity to increase over the coming year.”
The country is struggling with a chronic undersupply of housing. The Economic and Social Research Institute forecasts that roughly 35,000 new units are needed every year to meet demand.
Estimates on the present level of housebuilding vary. The government says that about 15,000 units were completed last year but Dermot O’Leary, chief economist at Goodbody Stockbrokers, said that the actual figure was roughly a third of that based on the number of building energy rating certificates issued.
General improvements in the economy have led to the 53rd consecutive increase in client confidence. Suppliers’ delivery times lengthened again as higher demand put pressure on vendors. Input costs continued to rise sharply, with higher prices for raw materials reported by panellists. Irish construction firms generally remained strongly confident.
Source: The Times
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