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Index Detects Marked Increase in Construction Activity and New Orders in Ireland

Recent figures have shown that despite signs of an overall slowdown in growth, both construction activity and new orders increased significantly last month.

There was also a sharp rise in the number of new jobs available in the construction sector.

These statistics are included in the most recent Ulster Bank Construction Purchasing Managers' Index (PMI), a periodic survey which tracks changes from one season to the next.

Chief economist Simon Barry at the Republic of Ireland at Ulster Bank, said that the most recent PMI were indicative of ongoing construction industry growth in Ireland in May. He stated that the headline index was 55.9, which is well over the 50 mark.

Although the rate of expansion was less dramatic, it still exceed the pre-downturn average. Mr Barry said that a slowdown from the record expansion rate recorded in February was likely inevitable, but he hoped to see some growth rate stabilisation in the coming months.

Although the expansion rate was at its slowest since November 2015, activity has gone up for the past 33 consecutive months.

Commercial construction projects witnessed the greatest rate of acceleration over the month, with housing activity also reporting a sharp increase. Civil engineering recorded a slight increase, which also happened to be the slowest in nine months of continuous growth.

 

Specialists in Construction Insurance

New business figures were up for the 35th consecutive month and reports suggested the projects previously on hold were now being progressed.

Job creation underwent a slight increase in May as construction firms hired more staff to accommodate the increase in orders.

The research also revealed the higher bills for raw materials and fuel had resulted in increasing cost inflation.

Mr. Barry added that headline figures aside, housing activity and new orders experienced weaker expansions, and business confidence took a slight dive. On the other hand, the rapid rise in construction activity was an encouraging sign that enabled construction firms to increase their job creation rates.

He summed up the overall picture as one full of sound improvements, although the rates of growth were less spectacular than they had been during the first quarter of 2016.

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