More Irish growth

13 June 2018

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Growth in Irish construction activity accelerated again in May as firms continued to catch up from the weather disruption seen in March, while new business and input buying also rose at faster rates, and job creation remained strong.

The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – posted 61.8 in May, up from 60.7 in April and signalled a sharp monthly expansion of activity during the month.

It found that the rate of growth quickened for the second month running and was the fastest for a year.

Activity has now risen in each of the past 57 months, Ulster Bank reported. It said a number of panellists had linked increases in activity to favourable weather conditions.

Simon Barry, chief economist for the Republic of Ireland at Ulster Bank, said, “The latest results of the Ulster Bank Construction PMI survey show that Irish construction firms experienced strong, and faster, rates of expansion in May.”

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He said that commercial construction had recorded another acceleration in activity which took the commercial PMI to its highest level in nearly two years, leaving commercial as the strongest performing activity category for the month.

There was also a sharp rise in residential activity which took the housing PMI to its highest level in a year. The results for civil engineering were not as favourable, with activity here registering a decline in May, ending a five-month run of expansion.

Barry said, “Other details from the survey also highlight the strength of the ongoing expansion in activity. Strong demand for the services of construction firms was very much evident in further substantial increases in new orders, with the new orders index picking up to a year-high in May.

“In turn, the buoyancy of activity and new business trends remains a very important driver of job creation and input buying in construction, with growth in both categories remaining at very elevated rates.”

He added that survey respondents remained strongly optimistic about the year ahead, “with a strong pipeline of new activity and improving economic conditions cited as important sources of support”.

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