Constructors have responded to rising workloads by taking on extra staff. Business expansion plans were also mentioned by some firms. The rate of job creation was substantial and the fastest in six months.
However, marked increases in demand led suppliers to increase their prices and resulted in delays in receiving purchased items.
The Ulster Bank Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index designed to track changes in total construction activity – posted 59.2 in February, down from 61.4 in January but still signalling a substantial monthly increase in activity during the latest survey period. Activity has risen continuously on a monthly basis throughout the past four-and-a-half years. The latest expansion was linked by panellists to improving market conditions and greater client activity.
Simon Barry, chief economist Republic of Ireland at Ulster Bank, said: “Building on the very positive start to the year noted in last month’s report, the February results of the Ulster Bank Construction PMI survey indicate that Irish construction firms continue to report very rapid expansion. While the headline PMI eased back from the eight-month high recorded in January, at 59.2 it still remains at very elevated levels consistent with robust growth in activity.
“Particularly encouraging was a further acceleration in housing activity where growth picked up to a ten-month high, leaving it as the strongest performing sub-sector last month. Growth in commercial activity was also very strong, albeit that the pace of expansion eased slightly in February. And civil engineering recorded a welcome third consecutive month of expansion, though the pace of growth was more modest than in the other sub-sectors.”
New orders continue to increase sharply, while there was also a strengthening of confidence about the year-ahead outlook. Sentiment rose to an eight-month high and was one of the strongest readings since the survey began over 17 years ago, with over 60% of firms anticipating further activity gains in the coming 12 months.
New orders increased sharply, with the rate of growth little-changed from January’s six-month high.
Higher new orders and efforts to replenish stocks led companies to increase their purchasing activity in February, extending the current sequence of growth to four years. The increase in demand for inputs impacted supply chains. Vendor delivery times lengthened to the greatest extent in seven months amid stock shortages at suppliers.
Meanwhile, suppliers were able to take advantage of higher demand to raise their selling prices during February. Consequently, the rate of input cost inflation remained sharp, easing only slightly from January’s recent peak.
Improving economic conditions and market confidence led to optimism among companies that construction activity will increase over the coming year. Moreover, sentiment strengthened and was one of the highest recorded in the survey’s history.