Rate of growth in construction activity touches its lowest in almost 2-1/2 years
The rate of growth in construction activity in Northern Ireland in August touched its slowest in almost 2½ years, revealed Purchasing Managers Index (PMI) from Ulster Bank. Figures indicated sharp spike in housebuilding over the month but weaker growth in commercial building resulted in lowest figures since March 2015. Another factor responsible for the fall in the overall rate of growth was a decline in activity in civil engineering.
The slowdown in growth has continued since June, the research showed. Although, there was low commercial growth in the sector, employment remained unaffected and the sector witnessed rise in employment, according to the PMI survey. On the other hand, the input costs increased sharply. Costs of materials also went up sharply in August.
“While the overall story remains one of continuing construction sector expansion, the latest PMI readings suggest that momentum behind the recovery has slipped a little – a trend that bears watching in the months ahead,”
said Simon Barry, the bank’s chief economist in Northern Ireland.
Meanwhile, firms in the North had to recruit more people last month due to a sharp rise in export orders, latest PMI figures showed. There was a rise in the number of new export contracts in August as the swinging pound delivered yet another boost for northern firms. The North’s private sector registered increase in output, the survey showed. More orders were received by firms in the North during August which exceeded the UK average for the first time in 2017.
The service, manufacturing and retail sectors witnessed highest growth. There was fast rise in new orders in the service sector while the manufacturing and retails sectors followed closely.
But an increase in input prices forced some local firms to pass on costs which also resulted in a sharp rise in output prices – at a much faster rate than the UK average.
Richard Ramsey, Ulster Bank’s chief economist for Northern Ireland, said the latest PMI report shows that the North was benefitting from the “robust recovery” in the euro zone.
“Northern Ireland firms are taking advantage of having one of the fastest growing economies in Europe – the Republic of Ireland – on its doorstep. Throw a weak currency into the mix and the conditions are ideal for local firms selling into the Republic of Ireland /euro zone market,”