Slowdown in construction sector accelerates

The slowdown of activity in the construction sector accelerated again at the end of the first quarter, according to figures published this morning.

The level of activity, new orders and employment all fell at faster rates than earlier in the year as the index reported its 70th successive month of slowdown dating back to April 2007. Firms cut their purchasing activity substantially.

The Ulster Bank construction purchasing managers’ index, which tracks changes in total construction activity, fell to 43.1 in March, from 45.3 in February.

The reading signalled a marked reduction in construction activity, and the strongest fall seen so far in 2013. Any reading below 50 signals contraction: a reading above 50 shows expansion.

“Previously encouraging signs on the trend in the new orders index gave way to renewed weakness last month as survey respondents cited a lack of available projects and strong competition for tenders as key headwinds,” said Simon Barry, chief economist at Ulster Bank in the Republic.

“Diminished new business opportunities continue to exert downward pressure on staffing levels as the employment index fell in March following three months in a row over which the pace of decline eased.”

Anecdotal evidence suggested falling new orders had contributed to the drop in activity.

In turn, a lack of available projects and strong competitive pressures led new business to decrease. New orders fell markedly, and at the sharpest pace in three months.