The Irish construction industry expanded in May but at the slowest pace in four months, while the rate of job creation has dropped to its slowest pace in more than four years, according to the latest snapshot of activity by Ulster Bank.
The bank’s purchasing managers’ index for construction businesses found that activity increased once again last month, continuing a run that dates back to September 2013.
At a reading of 54.9, the index remains well above the 50 breakeven level that marks the point at which contraction turns to expansion. However, there are signs that growth in the commercial construction sub-category is slowing down.
Ulster Bank's Simon Barry, the bank's chief economist for the Republic of Ireland, said the residential sector remained "a particular bright spot", with housing activity expanding sharply in May.
Both new business and employment levels continued to rise “at healthy rates” during the month, he said, with the slower rate of job creation – the lowest since March 2015 – “best seen as a retreat from the very elevated readings in recent months”.
The industry remains “optimistic” about its prospects over the year ahead, Mr Barry added.
Housing recorded the fastest rise of the three sub-categories monitored by the index. Commercial activity also increased, albeit at the most sluggish pace since August 2013. Civil engineering activity declined for the ninth consecutive month, with the rate of contraction quickening slightly last month.