Irish construction industry figures shows continued weakening

Irish construction continues to fall

Activity in the Irish construction industry weakened again in September as new business continued to fall.

The Ulster Bank Construction Purchasing Managers index stood at 41.9 in September, after a reading of 40.7 in August.

Any figure under 50 signals contraction in a sector, while over 50 signals growth. The industry has been in decline for over five years.

The index examines three areas -- housing, commercial and civil engineering.

Civil engineering saw the biggest decline last month, with the index falling to 30.8 from 35.6, the fastest fall in activity since December 2010.

Both housing and commercial activity decreased at slower rates in September, with the weakest reduction seen for activity on commercial projects.

Ulster Bank said that new orders decreased amid weak client demand and strong competition for any new business.  This led to a further reduction in employment numbers and the fall was the fastest in 16 months.

Input costs rose for the second month in row in September, mainly due to higher oil and fuel costs.

However, the level of optimism improved slightly over the month due to expectations of improving new orders from overseas markets.

''The survey results for September show that while the pace of contraction eased very slightly last month, the sector continues to exhibit widespread weakness,'' commented Ulster Bank's chief economist Simon Barry.

Barry said that in contrast to the persistent declines in the building industry, last week's manufacturing and services PMIs both recorded expanding activity levels.

He said this highlighted the ongoing divergence in trends between many areas of domestic demand which continue to struggle, and the internationally traded sectors of the economy which are managing to hold up relatively well.

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