The Ulster Bank Construction Purchasing Managers’ Index® (PMI®) – a seasonally adjusted index designed to track changes in total construction activity – rose to 58.6 in December from 55.5 in November
December data signalled a positive end to 2015 in the Irish construction sector, with activity rising at a sharper pace in response to further steep growth of new orders.
The rate of job creation also picked up during the month and business sentiment remained elevated as companies predicted further improvements during 2016. Activity has now increased in each of the past 28 months, with the latest expansion the strongest since July.
Commenting on the survey, Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, noted that: The Irish construction sector closed out 2015 on a firm footing according to the latest results of the Ulster Bank Construction PMI. The pace of activity growth picked up sharply last month as the headline PMI index rose to a five-month high of 58.6 in December, up from 55.5 in November. Overall activity trends were buoyed by a strong acceleration in both Commercial and Housing activity, with the pickup in the residential arena a particularly welcome development given concerns about the housing supply shortfall. Growth in Civil Engineering continues to lag some way behind the other sectors though it did record a fourth consecutive month of expansion last month.
“Overall, the December survey results indicate that Irish construction firms are reporting solid momentum as a second full year of recovery drew to a close. The New Orders index continues to show vibrant expansion, with increasing enquiries for new business pointing to a healthy near-term pipeline of activity. And firms certainly remain optimistic about prospects for the year ahead, with sentiment remaining close to record levels despite easing slightly from November. ”
Faster rises in housing and commercial activity
Each of the three monitored sectors posted higher activity in December. Faster expansions in activity were recorded on both housing and commercial projects. Civil engineering activity continued to increase at a much slower pace than the other sectors covered by the survey, and the rate of growth eased to a three-month low.