Activity in construction sector rises in South but North struggles post Brexit

8 Aug , 2016  

The latest Ulster Bank Purchasing Managers’ Index (PMI) shows strong performance in the construction sector in July.

The construction index hit 61, an increase from the 59.7 figure for June, and well above the 50 figure which separates growth from contraction.

It is the 35th month of growth and a majority of respondents forecast continued growth for the next 12 months.

Ulster Bank Chief Economist Simon Barry said: “The continuation of strong trends in overall activity and new business provide important encouragement that the sector’s recovery is maintaining solid momentum at present.

“It is important not to be complacent on this front, however. Uncertainty remains high about the extent of the possible adverse impact on the Irish economy from Brexit-related risks, even if the primarily domestic-focused construction sector isn’t in the line of fire to the same extent as the more export-oriented manufacturing sector where recent trends have clearly deteriorated as Brexit effects have begun to take hold.”

In the North, the news is not as good. Last week’s UK PMI signalled a fall in activity and the Ulster Bank Northern Ireland PMI followed suit as respondents primarily attributed lower activity to uncertainty caused by the result of the EU referendum.

The Northern Ireland construction PMI fell to 47.7, with construction seeing the fastest decrease compared to the retail, services and manufacturing sectors.