Employment growth in construction jumps amid brighter outlook

Another jump in construction activity last month led to the fastest rise in employment in the sector since 2004.

Ulster Bank's latest purchasing managers' index (PMI) suggests activity in construction continues to bounce back from the crash .

Although the pace of growth in January’s index moderated to 55.7, it remained above the 50 line that separates growth from contraction with a faster expansion of new orders and a near-record rate of job creation.

Rising workloads drove the increase in employment to a rate not seen since November 2004 with about 27 per cent of respondents signalling a rise in staffing levels during the month.

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The latest survey suggests new orders rose at a sharp but reduced pace last month linked to improving client demand amid stronger confidence.

Building cost pressures, however, saw the rate of input cost inflation pick up to its quickest level in almost 10 years

Sharp increases

Construction activity in the Republic has now risen in each of the past 41 months.

Both the housing and commercial construction categories continued to record sharp increases in activity. In contrast, civil engineering activity decreased, extending the current sequence of decline to three months.

"Respondents continue to judge the Irish construction outlook to be very favourable," Ulster Bank chief economist Simon Barry said.

“Confidence about future activity prospects remained strongly positive in January amid further solid gains in new orders, despite some easing in the rate of increase.

“One note of caution stems from further evidence of building cost pressures with the rate of input cost inflation picking up to its quickest in almost 10 years.

“Respondents reported higher prices for oil-related products and for items sourced from UK suppliers, the latter effect consistent with growing signs of Brexit-related price and costs increases in the UK economy.”