Ulster Bank Construction PMI shows activity increase in June
Survey showed fastest increase in activity since November 2004.
The Ulster Bank Construction Purchasing Managers’ Index (PMI) was released today and the results for June show that the construction industry in Ireland is continuing to gather momentum.
A seasonally adjusted index that tracks changes in the total construction activity, the PMI for June went up from 63.3 in May to 65.7 in June.
Any PMI over 50 signals an increase in activity and for sub-sectors of the industry, the pattern is the same as the total activity.
Housing activity has increased from 62.7 in May to 64.9 in June, commercial activity is up to 66.4 from 64.2 in the previous month and civil engineering activity has also increased; up to 52.8 from 51.9.
The latest set of results provide further encouragement for the industry. The rise in commercial activity is the sharpest since October 2014, and the total activity has grown at the fastest pace since November 2004 and the second fastest since the survey began.
Respondents to the survey believe that the total construction activity increase was helped in no small part through a rise in the number of projects and a growing confidence in the economy.
New business rose at its fastest pace since last November and a further increase in new orders means that this has gone up in each month for the past two years.
Confidence in workloads increasing, added to the continuing rise in new orders have also been responsible for companies creating more job opportunities – the pace of which is at its fastest for eight months.
More subcontractors were used for projects throughout June as well and because of this demand, coupled with low supply, they were able to put prices up at their fastest level this year.
Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, commented on the “marked re-acceleration” of total construction activity.
He said: “The recovery in Irish construction gained further significant traction in June according to the latest results of the Ulster Bank Construction PMI survey.
“Building on the solid improvement registered in April and May, overall activity again accelerated sharply last month as the headline PMI rose to 65.7.
“This is the second-highest reading in the survey’s 15-year history, with the pace of growth in June bettered only by the record rate of growth recorded in November 2004.
“Overall, following a notable slowdown in the early months of the year, there has been a marked re-acceleration in the pace of construction activity through the second quarter, thus offering considerable encouragement regarding the sector’s momentum as we enter the second half of the year.”
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