Building industry buoyant but growth slows

The construction sector continued to expand in March but growth slowed, according to the latest Ulster Bank, construction index.

Building activity increased for the forty-third month in succession, with firms linking growth to efforts to meet deadlines.

However, at 54.5, from 57.9, the Ulster Bank construction purchasing managers' index (PMI) - a seasonally adjusted index designed to measure the overall performance of the construction economy - suggested the rate of growth eased and was the weakest for four months.

Moreover, activity growth was slower than the averages for both the past year and the current expansionary period.

The bank's chief economist, Pat McArdle, said the February "bounce" in activity was "unwound in March as the pace of expansion in both civil and commercial eased perceptively.

"Commercial is still very strong but civil is edging down towards no-change territory. This is counter intuitive as Government capital spending was very strong in the first quarter so we will wait before jumping to conclusions.

"In underlying terms, overall construction may be stronger than the March PMI indicates. This may explain why employment, confidence and, to a lesser extent, new orders are holding up well," he said.