DESPITE A FALL in employment numbers and purchasing activity, the construction industry is said to be moving closer to stabilisation.

According to the latest Ulster Bank Construction Purchasing Managers’ Index (PMI), rates of decline eased and business optimism improved to the strongest since the boom-time.

At the same time, input prices decreased and the PMI rose for the fourth consecutive month. It now stands at 49.7, a reading that signals a marginal fall in construction activity that was the slowest drop in 20 months.

The results offer “further encouragement on trends in the Irish construction sector, which continues to show signs of stabilising”, noted economist Simon Barry.

“Most notably, the New Orders index posted another above-50 reading last month, thus pointing to a second consecutive monthly rise in new business levels.”

The improvements have started to foster increases in activity levels in the housing and commercial sub-sectors. Barry said it was the first time in six years that the two areas experienced a boost in the same month.

He continued:

“The overall PMI index also increased last month, though remained just slightly below 50, reflecting ongoing activity declines reported by firms operating in Civil Engineering.

But at 49.7, the headline PMI index is itself within touching distance of the stabilisation point of 50 – a milestone which looks set to be reached in the coming months, given the improvement in new business patterns.

“Overall, the improved trends in several areas of the Construction PMI chime with other indicators on the sector, including house completions and employment, which together suggest that the Irish construction sector is finally beginning to emerge from a six-year slump in activity.”

Rising new orders was the main factor leading to optimism among those in the industry, while panellists also mentioned improving economic conditions.

Unfortunately, the optimism or new orders has not impacted on employment as staffing levels continue to drop.

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