Snowfall cools construction output in Northern Ireland

April 16, 2018 / Isla MacFarlane
Snowfall cools construction output in Northern Ireland

The Ulster Bank Construction Purchasing Managers’ Index – a seasonally adjusted index designed to track changes in total construction activity – dropped to 57.5 in March from 59.2 in February.

Disruption caused by heavy snowfall at the start of the month contributed to slower expansions in construction activity, new orders and purchasing activity, but growth rates remained marked nonetheless.

Furthermore, the rate of job creation picked up and business sentiment remained elevated. Snow disruption also caused problems with supplier deliveries, with lead times lengthening to the greatest extent since December 2005.

This signalled a weaker rise in construction activity during the month, with growth limited by heavy snowfall. That said, output continued to increase at a sharp pace amid reports of greater new projects.

Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, said, “Despite having to contend with adverse weather during the early part of the month in particular, Irish construction activity continued to expand at a very brisk pace in March, according to the latest results of the Ulster Bank Construction PMI survey.

“A number of the survey’s main metrics (including the headline activity and new orders indices) did register some slippage last month reflecting weather-related difficulties. And snow disruption also proved problematic for supplier deliveries which were reported as being subject to longer lead times.

“However, at 57.5 in March, the headline PMI continues to point to robust growth, albeit not quite as rapid as in February when the PMI was at 59.2. In fact, we would not have been surprised to have seen a larger weather impact, particularly given the sizeable impact on factory output reported in the March Manufacturing PMI survey.

“So, we take the March survey results as further evidence of a construction sector which continues to register very strong underlying growth performance.

“It was also encouraging that the sector’s growth was again broad-based. Led by particularly strong growth in Housing activity, all three sub-sectors recorded expansion for the fourth month in a row.

“Furthermore, confidence levels among Irish construction firms clearly remain very buoyant as sentiment was little changed from February at levels that are amongst the highest on record. Over 63% of firms expect activity to increase in the coming twelve months, underpinned by confidence about the prospects for both the wider Irish economy and the construction sector itself.”

Housing again sees fastest rise in activity Further strong rises were seen in activity on both housing and commercial projects, although in each case the rate of growth eased. The only sub-sector to see a sharper increase in activity was civil engineering, but it still posted the weakest rise overall.

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