Housing activity biggest boost to construction in July

Construction activity accelerated in July amid reports of strengthening demand, the latest snapshot of the industry from Ulster Bank shows.

New orders continued to increase at a substantial pace, while companies took on staff and encountered inflation in the cost of materials such as insulation and steel as well as transport.

The Ulster Bank purchasing managers’ index for the sector, which tracks changes in construction activity on a seasonally adjusted basis, rose to 60.7 in July, up from 58.4 the previous month. This was the 59th consecutive monthly rise in activity and was a sharper rate of increase than that recorded in June.

Respondents to the survey pointed to higher rates of new orders, citing particular strength in the housing sector.

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Simon Barry, Ulster Bank's chief economist for the Republic, said the index reflected "very rapid growth" in construction. "Firms continue to benefit from sharp rises in incoming new business flows as they report ongoing improvement in client demand for their services," he said.

°Return to expansion

Civil engineering firms reported a return to expansion, which Mr Barry noted was perhaps linked to the recent step-up in the growth of exchequer capital spending.

Commercial activity also expanded in July, but it was housing that was the strongest performing sector, with the rate of expansion one of the highest ever recorded in the survey’s 18-year history.