Irish Construction Activity Weakens In September

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An index measuring construction activity in Ireland weakened further in September, as the wider economic downturn affected the construction sector, a survey by Markit Economics and the Ulster Bank showed Monday.

The headline construction purchasing managers' index stood at a seasonally adjusted 34.2 in September, down from 38.8 in the previous month. The decline ended three consecutive months of increases, with the rate of contraction being the steepest since May. An index reading above 50 indicates an expansion, while a reading below 50 signals a contraction.

Commenting on the latest results, Simon Barry, Chief Economist Republic of Ireland at Ulster Bank said " The latest reading of the Ulster Bank Construction PMI was somewhat disappointing, with the headline index pointing to renewed weakness in the construction sector in September. Overall, the construction PMI remains well off the record lows seen earlier in the year, but the downside surprise in the latest reading serves to highlight the ongoing contraction in the sector".

Civil engineering was the worst performer within the construction sector. The index which stood at 31.3 in September, was down on August's reading of 35.5, showing the fastest pace of decline since June. Housing activity decreased for 35th consecutive month, with the index dropping to 34.2 from 38.8. Commercial activity declined at the steepest pace in four months, with the index slipping to 34.9 from 39.8.

During the month, new business continued to fall for the 30th consecutive month, while employment declined to a four-month low. With falling new orders, purchasing activity also declined. Input costs fell substantially, due to falling demand. However, supplier performance improved substantially, despite easing to a four-month low.

Meanwhile, firms expressed a modest improvement in sentiment regarding future prospects for activity. "Although sentiment was at its most positive since February 2008, it remained weaker than the long-run series average. Optimism largely reflected an expectation that the housing market would stabilise over the coming year", Markit said.

(Market News Provided by RTTNews)