Construction activity slows as sentiment declines

Business confidence fell to a three-month low last month, a leading indicator shows

Construction activity growth slowed to an eight-month low at the end of the second quarter, according to the latest snapshot of activity by Ulster Bank.

At a reading of 53.1, the index remains well above the 50 breakeven level that marks the point at which contraction turns to expansion. However, it declined from 54.9 from May as business confidence fell to a three-month low.

For the sixth month in a row, the housing sub-category recorded the fastest rise in activity of the three monitored sectors last month. Commercial activity increased solidly, though the rate of expansion was the second-slowest in the current 71-month sequence of growth. Meanwhile, civil engineering activity slipped for the tenth successive month and at the fastest pace since November 2018.

Mirroring the trend for overall construction activity, input buying increased at a softer pace during June. The rate of growth, whilst solid, eased to the slowest since March 2015.


On the price front, the rate of input price inflation picked up slightly from May’s 32-month low.

"While sentiment eased back a little last month, almost 40 per cent of respondents are anticipating higher output levels in the coming 12 months, with stronger economic conditions expected to result in further increases in demand for construction work," said chief economist Simon Barry.