Construction activity on rise as increase in new orders
Latest indicator shows sentiment still subdued amid fears of further Covid disruptions
Housing activity rebounded for the first time in three months during October
Construction activity neared stabilisation in the Republic in October, albeit with reports of some ongoing disruption due to the coronavirus pandemic, according to Ulster Bank.
The Ulster Bank construction purchasing managers’ index (PMI), a seasonally adjusted index designed to track changes in construction activity – rose to 48.6 in October from 47.0 a month earlier. Still, a reading below 50 indicates that activity is contracting.
Although posting below the 50.0 no-change mark for the third month running, the reading suggested demand improved in October, leading to increased activity, Ulster Bank said.
“The latest results also again highlight that Covid-19 continues to disrupt construction supply chains, with supplier delivery times lengthening further last month amid reports of shortages of, and higher prices for, raw materials,” said Simon Barry, chief economist for Ulster Bank.
Housing activity rebounded for the first time in three months during October but further reductions were seen in commercial and civil engineering projects.
Growth in new orders supported increases in both employment and purchasing activity at the start of the final quarter. Staffing levels posted an outright expansion for the first time in eight months, while purchasing activity was at its highest since July. Moreover, the rate of expansion was marked and the fastest since May 2019.
Business confidence improved in October, amid reports of a strong pipeline of work and hopes the pandemic will come to an end. However, Ulster Bank said sentiment remained relatively subdued amid widespread concerns about the potential for further disruption.