Construction in the Republic of Ireland reached a four-month high in July 2016, with the commercial sector the strongest performer, according to the latest Ulster Bank Construction PMI survey.

July’s expansion of business activity at Irish construction firms came on the back of an accelerated increase in new orders, said Ulster Bank.

It found that rising workloads had encouraged companies to take on extra staff and increase their purchasing activity.

Business sentiment dropped from the previous month, but was said to have remained “strongly positive”.

The Ulster Bank Construction Purchasing Managers’ Index – a seasonally adjusted index designed to track changes in total construction activity – rose to 61.0 in July from 59.7 in June, which the bank said signalled a further substantial monthly increase in activity, and one that was the fastest in four months.

It added that total construction activity had now risen in each of the past 35 months.

Simon Barry, chief economist for the Republic of Ireland at Ulster Bank, said, “The latest results of the Ulster Bank Construction PMI survey show another sharp increase in Irish construction, with the pace of expansion accelerating to a four-month high in July.

“Underpinning the further uplift in activity last month was a further significant increase in new business, with the new orders index also rising to its highest level since March. The robust advances in activity and new business once again resulted in higher employment levels, with the rate of job creation picking up to a five-month high in July.”

He said the strongest-performing sector in July had been commercial, where growth had picked up to its fastest since February, while housing activity also continued to rise at a sharp pace, although slightly slower than in June.

Civil Engineering activity continued to expand, but at a pace he said remained some way slower than the other two main sub-sectors.

Barry pointed out that the July survey results offered a first glimpse into Irish construction trends following the UK referendum result to leave the European Union.

“The continuation of strong trends in overall activity and new business provide important encouragement that the sector’s recovery is maintaining solid momentum at present,” he said.

“It is important not to be complacent on this front, however,” he added.

“Uncertainty remains high about the extent of the possible adverse impact on the Irish economy from Brexit-related risks, even if the primarily domestic-focused construction sector isn’t in the line of fire to the same extent as the more export-oriented manufacturing sector, where recent trends have clearly deteriorated as Brexit effects have begun to take hold.”

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