Activity in construction sector continues to rise

Growth was led by the commercial sector, which had its strongest month since February.

There was another pick-up in activity in the construction sector during July, according to the latest Purchasing Managers’ Index from Ulster Bank.

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The main index hit 61 points last month – well above the 50 mark that separates growth from contraction – and an improvement on the 59.7 reading seen in June.

Growth was led by the commercial sector, which had its strongest month since February, according to Ulster Bank.

Total construction activity has now risen in each of the past 35 months.

Housing activity also saw strong growth – though the pace was down slightly on June – while civil engineering activity only grew slightly.

Respondents reported a rise in new business orders during July, with employment rising at its fastest pace in six months in order to meet demand.

Companies were also optimistic about the coming year, with 58% predicting the trend of growth to continue into the next 12 months.

The survey also suggested construction firms have taken on additional staff and expand their purchasing activity off the back of the strong sector growth.

Employment rose for the 35th successive month, and at the fastest pace since February.

Chief Economist at Ulster Bank Simon Barry said the uplift in activity during July was underpinned by “a further significant increase in new business, with the new orders index also rising to its highest level since March”.

He added: “The continuation of strong trends in overall activity and new business provide important encouragement that the sector’s recovery is maintaining solid momentum at present.

“It is important not to be complacent on this front, however. Uncertainty remains high about the extent of the possible adverse impact on the Irish economy from Brexit-related risks, even if the primarily domestic-focused construction sector isn’t in the line of fire to the same extent as the more export-oriented manufacturing sector where recent trends have clearly deteriorated as Brexit effects have begun to take hold.”

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