New figures published this morning for the construction sector have confirmed it remains in strong growth mode.
While the Ulster Bank Construction Purchasing Managers’ Index (PMI) reading slipped to 58.3 in August from 60.7 in July, the performance last month still pointed to a sharp rise in construction activity. Any figure above 50 indicates expansion.
The sector has been expanding for five years since the depths of the downturn where housebuilding ground to a virtual standstill.
But the increased demand for construction materials is also contributing to longer delivery times as suppliers cope to fill orders. The rate of input cost inflation also accelerated to a three-month high last month. Construction purchasing managers have reported that the cost of a range of materials has risen.
Within the latest PMI figures, the housing PMI reading slipped to 60.3 from 63.9 in July. “While the housing PMI pulled back a bit from what was one of its strongest ever readings last month, this month’s reading of 60.3 continues to point to very rapid expansion,” said Ulster Bank chief economist for the Republic of Ireland, Simon Barry.
He added that the August reading suggests that robust growth in housing output is being sustained through the third quarter, following growth of more than 30pc year-on-year in housing completions during the first half of the year.
The latest survey also found that almost 60pc of respondents predicted a rise in construction activity, with new work on housing projects cited as a factor expected to support continued expansion.