Ulster Bank chief economist Simon Barry: “Significantly, overall activity rose for the first time in over six years, as the headline PMI jumped by six points.”
According to figures published on Monday in the Ulster Bank Construction Purchasing Managers’ Index (PMI), in September of this year, for the first time since 2007, construction activity showed a level of growth. September’s reading was 55.7, whereas August’s reading was at just 49.7. Any return over 50 indicates and increase in construction activity. This rise above the 50 mark was the first since May 2007.
This growth in construction activity is said to have stemmed from an increase in purchasing activity and employment therefore increasing business “at a sharp and accelerated pace”.
Public building projects
Support for construction was expected in the budget, possibly in the form of pledges to increase spending on public building projects next year.
The recession has seen the construction industry plummet from €38 billion per year to €8 billion per year in the last 6 years, and employment fall from more than 350,000 to about 100,000. Although, according to The Construction Industry Federation, there were signs of a recovery in the sector, with job numbers growing by 6,400 to 102,700 in the first six months of the year. And the PMI figures appear to verify this recovery.
Civil Engineering, State-funded projects, on the other hand, appeared to continue to decline in September. Such projects dropped to 47.3. Although, the number indicates that the fall was not as sharp as in August, when it declined to 41.
Employment steadied at just above the 50 mark, but appears reluctant to climb, due to cost considerations still weighing heavily on the companies surveyed.