Builders saw sharp fall in activity last month
Monday, 10 December 2007 08:44
New figures published today show that the Irish construction industry continues to slow down. Construction activity in November declined for the sixth month in a row, according to the Ulster Bank Construction Purchasing Managers index.
The index - a seasonally adjusted index designed to measure the overall performance of the construction industry - stood at 42 in November, just marginally above the 50 month low recorded in September.
Ulster Bank says that housing activity fell at a record pace as the rate of decline accelerated for the fourth month in a row. However, there was just a marginal fall in work on commercial sites, while civil engineering activity increased solidly since October.
The index says that builders saw a sharp fall in new orders last month, with firms linking the decline to weaker demand for housing and a general deterioration in economic conditions. New business levels fell at the fastest pace sine May 2003. Employment at building companies also continued to decline sharply in November.
Input prices paid by construction companies increased last month, although the rate of cost inflation slowed to its weakest since January 2004. Where an increase in costs was reported, it was linked to higher prices for oil and metals.
Ulster Bank says that construction companies are optimistic that their activity levels will rise over the next 12 months, although their level of confidence remained well down on levels seen through the first half of the year.
‘November was another weak month with contraction still the order of the day,’ commented Pat McArdle, Chief Economist at Ulster Bank. He said that builders seem to be finishing existing schemes, but not taking on new work.