Growth in the Irish construction sector picked up at the end of the second quarter of 2016, with faster rises in activity, new orders and employment all recorded. Meanwhile, confidence around the prospects for continued expansion over the coming year was at a near-record high.
The Ulster Bank Construction Purchasing Managers’ Index® (PMI®) – a seasonally adjusted index designed to track changes in total construction activity – rose to 59.7 in June from May’s six-month low of 55.9.
This signaled a sharp monthly expansion in construction activity, and extended the current period of growth to 34 months. Panelists reported a general improvement in market activity.
Commenting on the survey, Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, noted that: “Growth in Irish construction activity accelerated markedly in June, according to the latest results of the Ulster Bank Construction PMI survey.
“The rate of overall expansion picked up to a three-month high last month, as the headline index rose to 59.7 from 55.9 in May leaving it significantly above the 50 no-change benchmark.
“The improvement was broadly based, highlighted by faster growth rates across the three main sub-sectors, with the sharpest increase recorded in Commercial activity, just ahead of Housing.
“Firms also reported further robust increases in new business, with June marking three full years of steadily-rising new orders as the sector continues to distance itself from the depths of the downturn.
“The June Construction PMI survey was conducted over the second half of the month, with the majority of responses returned prior to the UK referendum result.
“Thus, while some respondents knew the outcome of the referendum when responding to the June survey, it is too soon to judge the extent of any Brexit-related impact on confidence and activity in the construction sector.
“In fact, the June results show that Irish construction firms are strongly optimistic about the prospects for future growth over the coming year.
“Sentiment improved sharply last month (June) and was just lower than the record high recorded in late 2014.
“So while the PMI survey results will bear particularly close watching in the months ahead, the encouraging strength of activity, orders and sentiment at the end of the second quarter indicates that the Irish construction sector carries solid momentum into the second half of the year.”