Construction activity falls for second month in a row
The level of home building slipped for the second successive month in June, according to AIB’s latest Construction PMI report.
AIB’s Ireland Construction Total Activity Index also posted below the 50 no-change mark for the second month in a row in June – falling to 48.6 in June from a reading of 49.2 in May.
AIB said that in line with the picture for total construction activity, work on housing projects decreased for the second successive month in June. While the rate of decline was modest, it was the fastest in almost a year-and-a-half.
Civil engineering activity was also down, leaving commercial as the sole source of growth during the month. Meanwhile, commercial activity increased for the fifth month in a row, and at the same solid pace as in May.
Today’s PMI also showed that new orders, employment and input buying continued to rise in June, albeit at modest rates.
Input costs increased sharply, but at the slowest pace in five months.
Companies remained optimistic that activity will increase over the coming year, with confidence reflecting expected improvements in demand, particularly related to housing.
But concerns around geopolitical issues and economic uncertainty meant that optimism eased to a three-month low, AIB noted.
John Fahey, AIB’s Senior Economist, said the latest PMI survey for June indicated a muted performance for the sector heading into the second half of the year.
He noted the headline index was below the key breakeven level of 50 for a second consecutive month.
“The June reading of 48.6 was lower than the 49.2 level registered in May, implying a quicker pace of contraction in construction activity at the end of the second quarter,” he said.
But he added that construction sector firms retained an optimistic outlook that activity levels would increase over the coming 12 months.
“An expected improvement in housing activity was cited as one of the reasons underpinning this perspective,” he added.
Article Source – Construction activity falls for second month in a row – AIB – RTE