Construction activity boosted in April while companies increase stock

Ongoing increases in demand for construction work ahead of Brexit helped the sector

Construction activity rose sharply in April while purchasing inventory also ratcheted up as companies seek to avoid Brexit-related supply disruptions, according to a survey from Ulster Bank.

The bank’s construction purchasing managers index (PMI) showed that business levels continue to rise underpinned by ongoing increases in the demand for construction work.

But Brexit still weighed on confidence and some companies surveyed noted lower demand while others said they would brought forward purchases to mitigate potential supply issues.

"Nevertheless, the April PMI indicate that construction remains the fast growing major sector of the economy, with growth continuing to outpace that reported in both manufacturing and services where international risks and headwinds, including those linked to Brexit, represent more of a challenge," said Simon Barry, Ulster Bank's chief economist in the Republic.


Housing, as opposed to commercial or civil engineering activity, recorded the fastest rise in activity for the fourth successive month during April. Commercial activity also increased, though at the slowest pace in six months while civil engineering activity declined.

Extra staff

Meanwhile, while job creation was quicker than the series average, employment growth eased slightly during April despite the fast rise in new business. “Anecdotal evidence from panellists indicated that extra staff had been hired in order to keep up with customer demand,” the survey said.

On pricing, the rate of input cost inflation slowed to a four-month low although there were reports of greater prices paid for steel, insulation and transport while left cost burdens high.

Overall, Irish construction companies picked up from a 68-month low during April, with just over 40 per cent of those surveyed expecting activity to increase over the coming year. The relative positivity was linked to forecasts of increased sales activity, new capital investments and subsidence of Brexit uncertainty over the next 12 months.

The PMI rose to 56.6 in April, up from 55.9 in March.

Peter Hamilton

Peter Hamilton

Peter Hamilton is a contributor to The Irish Times specialising in business