THE IRISH CONSTRUCTION sector has seen another boost, with August marking one year of continuous growth for the sector.

That’s according to the Ulster Bank Construction Purchasing Managers’ Index (PMI), which tracks changes in total construction activity.

It registered at 61.4 in August, which was down slightly from the reading of 62.6 in July, but is said to still signal “a strong increase in activity at construction firms in Ireland”.

Expansion

The sector also saw another sharp expansion in August, meaning that activity in the Irish construction sector has increased in each month throughout the past year.

Growth was supported by another steep rise in new orders, and companies were strongly optimistic that activity will continue to increase over the coming year.

Growth of new work was reportedly the key factor leading activity to rise.

Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, said:

The solid improvement continues to be underpinned by particular strength in both the housing and commercial arenas where activity trends are benefiting from substantial increases in new orders.

He said that the solid trends in new business are “translating into higher staffing levels, with the employment index recording its twelfth consecutive month of expansion”.

Indeed, the headline PMI index itself has also now been in expansion territory for the past twelve months as the sector continues to pull away from the deep trough reached following the 2007-13 downturn.

Looking forward

According to Barry, construction firms are confident that the sector’s recovery will remain on track in the coming year.

“Sentiment rose for the third month in a row in August, taking it to a near-record high, as respondents anticipate that further improvements in both the construction sector itself and the broader economy will result in further activity gains in the coming twelve months.”

Construction firms recorded sharp increases in activity on both housing and commercial projects during the month.

But in contrast, civil engineering activity continued to fall at a modest pace.

There was an increase in new work during August, with new business having risen in each of the past 14 months.

Companies have been taking on extra staff, with employment increasing in each month throughout the past year.

The availability of sub-contractors in the Irish construction sector declined to the greatest extent since September 2000 as sub-contractor usage increased solidly again during August.

Companies have also begun to increase their purchasing activity again.

This meant that supplier capacity came under pressure, while on the cost front, a number of respondents indicated that suppliers had used increased demand to raise their charges.

Read: Government housing adviser: This is not a crisis, prices have a “natural braking mechanism”>