The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – in Ireland rose to 60.7 in July from 58.4 in June.
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The reading signalled a fifty-ninth consecutive monthly rise in construction activity, and one that was sharper than in the previous month.
Respondents pointed to increases in new work and specific strength in the housing sector.
Consistent with anecdotal evidence, the housing subcategory recorded the fastest rise of those monitored by the survey as the rate of expansion accelerated.
Commercial activity also increased sharply over the month, while civil engineering activity returned to growth following two consecutive months of decline.
New orders continued to rise sharply amid reports of improving customer demand.
New business has now increased in each of the past 61 months, although the rate of growth eased from June to a four-month low.
The need to keep up with improvements in demand encouraged construction firms to raise their employment and purchasing activity during July.
Employment increased at a substantial pace, with job creation now having been recorded continuously for almost five years.
Meanwhile, the rate of growth in purchasing activity eased for the second month running but was still strong.
Rising demand for inputs led to capacity pressures on suppliers to the Irish construction sector.
As a result, delivery times lengthened again in July.
Although solid, the rate of deterioration was the weakest since last November.
Material shortages contributed to another sharp increase in input prices during July, with higher costs for insulation, steel and transport mentioned.
There were also reports of higher staff costs.
The rate of input price inflation ticked up from June.
July saw an improvement in confidence among construction firms, with optimism regarding the 12- month outlook for activity remaining strong.
Expectations of improvements in economic conditions and customer demand were behind positive sentiment. ■