The latest results of the Ulster Bank Construction PMI survey indicate that Irish construction firms continued to report rising activity levels in July. However, the pace of activity growth lost further momentum last month to leave the rate of expansion at its slowest in almost 6 years.
The sub-sector detail painted a mixed picture. Growth in commercial activity picked up to a 4-month high, but this was offset by weaker performances in civil engineering and in housing. Notably, the pace of residential activity eased to a 6-month low, albeit that housing - with its solid PMI reading of 55.7 still well above the expansion threshold of 50 - remains the fastest-growing sub-sector.
Commenting on the survey, Chief Economist Republic of Ireland at Ulster Bank, Simon Barry said, "Looking ahead, firms continue to anticipate increased activity levels over the coming 12 months as confidence about future prospects is being underpinned by expectations for stronger demand. However, optimism levels have continued to slip back from previous highs with the future activity index declining to its lowest level in over 6 years amid some reports that Brexit is having a negative impact on the outlook."
He added, "More generally, after a 3-year period of particularly and exceptionally rapid expansion in 2016-18, a variety of official indicators (including output, investment and employment) have clearly signalled that the pace of growth in construction has cooled in the first half of this year. The July PMI results provide early, if still somewhat tentative, evidence of a further moderation in the sector’s performance early in the second half."