Activity in the Irish construction sector has been falling for almost four years, with the latest construction index from Ulster Bank showing the sector has been declining for 46 months.
The Construction Purchasing Managers’ Index tracks the three sectors of the industry - housing, commercial and civil engineering activity.
The index fell to 46.1 in March compared to February’s reading of 47.8. Any figure under 50 signals contraction.
Ulster Bank said that the pace of decline in housing accelerated to its fastest rate since December of last year. The rate of decrease in both commercial and civil engineering slowed a little, with engineering still the worst of the three sectors.
However, Irish construction firms are optimistic about the prospects for activity growth over the coming year from current low levels, Ulster Bank said. Around 45% of respondents expect business activity to increase over the next 12 months. This means that building firms are the most confident about the future than they have been at any other time in the last four years.
A lack of new business continues to dampen activity in the Irish construction sector, with almost 30% of respondents to the survey reporting a decline in orders last month, commented Ulster Bank economist Simon Barry.
’An additional headwind for the sector at present is rising input prices for oil and fuel in particular, related to upward pressure on commodity prices at the global level,’ he added.