JOB LOSSES in the construction sector last month were the sharpest yet recorded by the Ulster Bank purchasing managers’ index, which dates back to June 2000.
Index figures for March, released yesterday, showed the sector remains in a very weak position, with respondents pessimistic about an early recovery.
The seasonally adjusted figure for March was 28.1, indicating a steep reduction in activity and mirroring what happened in February. A score of 50 would indicate no change.
The figures for the various sub-sectors, with the February figures in brackets, were: residential 26.7 (26.4); commercial 28.3 (26.2); and civil engineering 28.5 (33.1).
After two months of being the worst-performing category, the commercial sector posted a slightly weaker reduction in March.
However, the rate of contraction remained significant. Although registering the slowest reduction of the three sectors, activity on civil engineering projects fell at its fastest pace since August 2003.
“We speculated last month that the commercial index might be levelling off,” said Ulster Bank chief economist Pat McArdle.
“In March, it posted a second successive rise, albeit that it remains at a level that still signals significant contraction. It may now join housing which has oscillated at very low levels for the past 16 months.
“Civil engineering, in contrast, continues to fall, and prospective cuts in capital spending would indicate that it may have further to go.
“The overall picture is one of an industry that is at a low ebb. That said, several other European countries are now in a similar situation.”
He said there were three record lows in the latest figures: employment, which is a lagging indicator; rates charged by sub-contractors; and input prices.
“The pace of job cuts accelerated to its fastest in the history of the series in March, reflecting a response by Irish constructors to lower activity requirements. Approximately 55 per cent of panellists reported decreased employment over the month, against less than 1 per cent that recorded an increase.”
An expectation that the recession will continue over the coming 12 months was behind March’s outlook among builders, despite sentiment being slightly less negative than in the preceding month, Mr McArdle said.
