The building industry’s revival gathered speed in May, which marked its strongest month of growth since November, according to figures released today.
The Ulster Bank Construction Purchasing Managers' Index (PMI), which tracks the sector's performance on a monthly basis, hit 63.3 in May, indicating that the industry grew strongly during the month.
Growth in the three key categories: housing, commercial building and civil engineering – mainly large-scale State-backed projects – ensured that the index overtook the 57.2 reading in April.
The Ulster Bank PMI takes 50 as its benchmark. Any reading above that figure indicates that the construction industry expanded, while any result below that number indicates that it shrank.
Commenting on the survey, Simon Barry, Ulster Bank's chief economist for the Republic of Ireland, noted that the index reveals a further improvement in the industry in May.
Sharp rise
“Following a noticeable pick-up in April, activity rose sharply again last month with the headline PMI index accelerating from 57.2 to 63.3, its highest level since November of last year,” Mr Barry said.
He added that this extended the sector’s run of continuous expansion to 21 months.
“The detail behind the headline paints a similarly optimistic picture,” Mr Barry said.
“For the second successive month a marked acceleration in activity was recorded in two out of the three major sub-sectors, namely housing and commercial, while civil engineering activity also edged higher, albeit at a much less rapid pace.”
A sharp expansion of new business at construction companies in May matched the increase of activity measured by the index.
New orders rose for the 23rd month in row and at the fastest rate in 2015 so far.
Survey respondents indicated that this was driven by an increased number of tenders for which they were able to bid.
Higher workloads prompted companies to boost both employment and purchasing activity in May. Job-creation hit a four-month high as a result.
However, the accelerated rate of activity led to a lag in delivery times and drove up the cost of materials.
Ulster Bank said that a number of respondents complained that the euro’s weakness against other currencies was driving up the cost of imported supplies.
Builders were generally confident that activity would continue to increase over the coming year.
Sentiment improved in May to one of its highest points in the survey’s history.
