Building sector continues to decline
The Irish construction sector continued to contract in December, though at a slower pace than in previous months, as the number of new orders and employment fell at weaker rates.
The latest Ulster Bank Construction Purchasing Managers’ Index (PMI), which tracks changes in the construction sector, showed that the seasonally adjusted index rose to 43 in December, up from 42.6 in the previous month. A figure below 50 indicates a decline in activity.
In contrast, the sector returned a figure of 49.9 in December 2011, meaning it was nearing expansion. New business decreased for the 12th month running. The rate of contraction was marked, but the slowest since June 2012. In line with deteriorating new order levels, builders lowered both their employment and input buying.
The rate of contraction in commercial building stood at 41.3, compared to 39.8 in November. This figure was 49.8 in December 2011. The figures for house building rose to 45.8 from 44.2 in November. However, they are down considerably from December 2011, when 52.3 was recorded showing expansion in the housing sector.
“One disappointing aspect of the sector’s performance in 2012 was that the hoped-for stabilisation failed to materialise, and the industry continues to be dogged by recessionary conditions, including persisting falls in new work orders and employment levels,” according to Ulster Bank chief economist Simon Barry.
On a positive note, business sentiment improved to the strongest in five months during December.