The rate of construction activity in Ireland continued its recent pattern and eased further in October, to a low not seen for more than three years.
According to the latest Ulster Bank Construction Purchasing Managers Index (PMI) – the seasonally adjusted index that monitors changes in construction output – October was responsible for a rate of construction not seen since March 2015.
At 52.9, the PMI is down from September’s figure of 56.2, which itself represented easing in the rate of construction activity.
However, to counter this moderate rise, October’s performance was still above the 50.0 no-change mark, which means the rate of activity has actually increased for the last 62 months.
Simon Barry is the Chief Economist Republic of Ireland at Ulster Bank. He is not surprised that there has been a downturn, given the end of summer, and he said he isn’t “overly concerned.”
He said: “It is not wholly surprising to see some cooling in the pace of construction growth given the extremely rapid expansion recorded in the summer and the similar signs of slowdown from elsewhere in the Irish private sector of late.
“But the headline results from the October construction survey are certainly on the disappointing side.
“Nevertheless, we are not overly troubled at this stage, for several reasons. First, we think at least some of the recent slippage in the construction PMI likely reflects the usual ebb and flow of the headline survey results.”
All three sub-categories suffered from slower rates of construction; commercial was the best performing, but also saw the largest fall in the rate of activity from September – from 58.1 to 53.9 in September.
The rate of output also fell in housing for October, down to 53.9 to 58.1; for civil engineering, the rate of activity continues to decrease.
However, the rate of employment growth within Irish construction accelerated in October for the 62nd month in succession, and is at a three-month high, which suggests a healthy number of projects are ongoing.