Tuesday , January 31 2023

In October, the construction sector will continue to grow, but the expansion rate will slow down.


Growth in the construction sector continued into October, but the rate of expansion slowed down to its slowest rate in three years.

Ulster Bank's Construction Purchasing Managers' Index (PMI) shows that commercial development, residential construction and public works activity rose again last month.

The index, which means that the Republic of Korea's construction industry has been expanding for five years, has overcome the severe recession triggered by the 2008 financial crisis.

This index, which reflects the performance of the sector each month, reached 52.9 in October and indicates that the industry has grown over the month.

Ulster's PMI is based on 50 points. Numbers in excess of this figure indicate that the industry has expanded in the previous month, and the results below have been shrinking.

The reading in October was lower than the 56.2 recorded in September, showing a slower rate than last month, while activity increased. According to Ulster Bank, the lowest growth since March 2015.

Simon Barry, chief economist for the major shareholder in the Republic of Ireland, pointed out that the index had fallen for three consecutive months. Industry still "relaxed" in the expansion area.

"It is not surprising to see a slight cooling in the pace of construction growth given the extreme expansion in summer and similar signs of recession elsewhere in the late Irish private sector." "But the headline results of the October construction survey are certainly disappointing."

Barry said the bank believes that at least part of the fall is due to the usual decline and flow of research findings.

Strongest performer

This figure shows that commercial buildings such as offices and factories are the strongest performers in the month of October, up to 53.9. House construction was 53.6.

Civil engineering, including large state funded projects, dropped to 45.3, a significant decline in activity. However, the steepest decline in this area for only 14 months. But Barry points out that the potential for Exchequer spending on infrastructure is one of the factors that underpin the future growth of the industry. Measures to address the continuing shortage of housing in the republic were another.

"The headline PMI results for October point to a disappointing start in the last quarter of construction activity, but we will be surprised if the results of the months ahead show no signs of new improvements."

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