Construction recovery reaches fastest pace since January 2006

New orders drove expansion last month, Ulster Bank Construction PMI shows

New orders drove growth in the Republic’s building industry last month to its fastest pace since January 2006, according to figures published today.

The Ulster Bank Construction Purchasing Managers' Index (PMI) shows the sector expanded in March, its seventh consecutive month of growth, signalling that a recovery that began late last year continues to gather momentum.

The index hit 60.2 last month from 56.2 in February. The PMI uses 50 as its benchmark, with any figure over that point indicating that activity grew on the previous month, and any number below that signalling a contraction.

The report says the rate of expansion recorded in March was the sharpest since January 2006, the beginning of a year during which the industry built a record 90,000 new homes in the Republic.

Simon Barry, Ulster Bank's chief economist in the Republic, said the figures show the building industry's recovery gathered pace at the end of the first quarter of the year.

“Housing activity continued to rise sharply in March with last month representing the ninth month in a row of expansion linked to residential projects,” Mr Barry said, adding that commercial activity also continued to expand briskly.

He said that a strong increase in new orders last month suggested that the near-term prospects for the sector’s continued recovery remained healthy.