Construction activity falls sharply

Construction activity fell sharply again in October as new orders declined, according to the Ulster Bank construction purchasing managers’ index. Business sentiment in the sector deteriorated to the lowest point in almost two years.

“The rate of decline remained sharp last month, with the index, at 42.6, still way lower than the expansion threshold of 50,” said Ulster Bank economist Simon Barry.

“Furthermore, the latest survey results confirm that widespread weakness remains a feature of the Irish construction landscape, with large-scale declines still evident across housing, commercial and especially civil engineering.”

Given the paucity of new orders in October, activity and employment trends are unlikely to show much improvement in the near-term, Mr Barry added. “Adding to the woes of the sector, firms also reported rising input costs for the third consecutive month reflecting higher energy and fuel costs as well as some upward pressure on import costs from recent euro weakness.”

A number of respondents to the survey predicted that demand would continue to fall over the coming year.