Pace of building growth hits six-year low, says Ulster Bank
Ulster Bank PMI index was 51.4 in July, down from 53.1 in June as Brexit looms
There is still confidence builders will get busier over the next 12 months. Photograph: Alan Betson
Growth in construction activity in the Republic slowed last month to its weakest rate in almost six years, according to an index maintained by Ulster Bank.
The bank’s Construction PMI (purchasing managers index) for July showed a “a modest expansion” in activity, the bank said. The rate of growth in house building activity and engineering weakened considerably, while there was a pick-up in growth in the commercial building sector.
“The pace of residential activity eased to a six-month low, albeit that housing . . . remains the fastest-growing subsector” in the construction industry, said Simon Barry, Ulster Bank’s chief economist in the Republic.
The index stood at 51.4 in July, down from 53.1 in June. A figure above 50 indicates expansion in activity.
Although optimism in the sector has slipped due to the uncertainty over Brexit and other macro-economic factors, there is still confidence within the sector that builders will get busier over the next 12 months.
“However, optimism levels have continued to slip back from previous highs,” said Mr Barry.
Meanwhile, in the North, there was a “marked decrease” in business conditions according to the latest PMI survey, as Northern Ireland recorded the fastest rate of decline in new orders, exports and business output compared to any other region in the UK.
Manufacturing in particular experienced the sharpest drop in jobs, orders and output as Brexit uncertainties continued to impact across every sector.
Overall, Northern Ireland companies reported another fall in employment numbers, which they blamed on lower new orders and problems recruiting staff with the correct skills set.
Firms also had to battle with higher input costs last month while output inflation rose to a five-month high.
Not surprisingly, the PMI also highlights that business confidence in the North was “by far the weakest” during July of all the UK region’s monitored in the latest report.