Construction sector shows signs of recovery

Two sector indices show growth

The Irish construction sector has shown further signs of recovery, with the number of new orders rising last month. Two indices on the sector show growth in the last month.

According to the Ulster Bank Construction Purchasing Managers Index (PMI), the overall workforce also increased in February as companies expressed optimism about the year ahead. The seasonally adjusted index, which tracks changes in the construction sector, has now registered increasing activity for six months in succession.

Simon Barry, chief economist at Ulster Bank, said: "The February results of the Ulster Bank Construction PMI point to further rises in Irish construction activity."

Mr Barry said the half-year period of growth indicated the recovery was becoming “increasingly well-established”.

"The pick-up in activity is translating into a welcome rise in staffing levels, with the employment index also registering a sixth consecutive monthly expansion in February," he said. "Looking ahead, near-term prospects for the sector are supported by further growth in new orders as firms reported better market conditions are generating new business.

'Strongly optimistic'

“Beyond the near-term, firms remain strongly optimistic about the sector’s 12-month outlook as sentiment last month remained close to the record high seen in December, buoyed by more positive signs in the wider economy.” The sharpest expansion in activity was recorded on residential projects. An increase in commercial activity was also registered but civil engineering activity continued to fall at a sharp pace during the month.

Meanwhile, the latest Tender Price Index from the Society of Chartered Surveyors Ireland shows construction tender prices increased through 2013.

The SCSI Construction Tender Price Index shows construction tender prices grew by 2.2 per cent in the second half of 2013, up from 0.9 per cent in the first half of the year. The annual increase for 2013 is 3.1 per cent.