Construction activity slumps to 11 year low due to Covid-19 restrictions
Construction activity fell to its lowest level in 11 years as Covid-19 restrictions halted building across the country last month.
Ulster Bank’s construction purchasing managers’ index, which follows the sector’s performance every month, fell to 28.9 in March from 50.6 in February, indicating that the industry virtually collapsed.
The outbreak of the virus hit all three categories of construction covered by the survey in March, with steep declines recorded in housing, commercial and civil engineering activity. Civil engineering posted the sharpest reduction, Ulster Bank noted.
Simon Barry, chief economist at Ulster Bank, said the headline PMI index fell to levels that have only previously been seen at the height of the global financial crisis.
He noted that the March decline was the largest monthly drop in the survey’s 20-year history and underscored the extent of the disruptions faced by Irish construction firms last month.
“The forward-looking elements of the PMI survey also painted an extremely weak picture, signalling that the sector is likely to remain under significant pressure in the near-term,” Simon Barry said.
The New Orders index plummeted to an 11-year low in March as respondents mentioned that the cancellation of projects and company shutdowns contributed to the sharp contraction in new business inflows.
The Employment PMI also signalled a very sudden and abrupt change of direction for Irish construction employment as the index pointed to rapid contraction in staffing levels following six and a half years of growth.
“Moreover, confidence about the coming year also plunged in March, leaving the Future Activity Index at its lowest level since early-2009,” the economist said.
“Around 45% of respondents anticipate a fall in activity over the coming year as the coronavirus and uncertainty about its duration are leaving a huge mark in construction sector sentiment,” he added
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