Irish construction nears stabilisation after Covid-19 hit

150,000 construction workers are operating on 1,100 sites, according to the CIF

The construction industry fears activity will be hit again if the Government  introduces tighter pandemic controls in the coming months.

The construction industry fears activity will be hit again if the Government introduces tighter pandemic controls in the coming months.

 

Construction activity showed signs it was approaching stabilisation in the Republic in September, having spent the summer recovering from the Covid-19 economic lockdown earlier in the year, 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 47.0 in September from 44.0 in August. Still, a reading below 50 indicates that activity is contracting.

Although posting below the 50.0 no-change mark for the second month running, the reading suggested a move towards stabilisation in activity, Ulster Bank said.

The index had collapsed to just 4.5 in April as construction ground to a halt as it was hit by Covid-19 restrictions. The fear in the industry is that activity will be hit again if the Government follows the recommendation of health officials and introduces tighter pandemic controls in the coming months as coronavirus cases soar again.

Currently, about 150,000 construction worker are operating on 1,100 sites, according to the Construction Industry Federation, which has been arguing that its members’ activities should be classified as essential as they are building badly needed houses and also infrastructure for manufacturing and other sectors.

“The rate of decline in overall activity was significantly less-pronounced than seen in April and May, and the pace of contraction did ease somewhat relative to August, helped by developments in commercial activity,” said Ulster Bank economist Simon Barry of the latest PMI reading.

“However, construction firms - similar to their counterparts in manufacturing and services - reported that Covid-19 impacts continue to weigh on the sector, with the pandemic cited as a headwind in relation to trends in activity, new business and hiring.”

In addition, industry players also spoke in September of experiencing stock shortages at suppliers and difficulties in sourcing items which have contributed to a “notable acceleration in input cost inflation”, Mr Barry said.

“In addition to the pandemic, the anecdotes from the September results also cited Brexit as a cause for renewed concern.”