A measure of activity in the construction sector shows that growth slowed for the fourth month in a row in September.

The Ulster Bank Construction Purchasing Managers’ Index (PMI), compiled by research group Markit, recorded 56.3 – down from 57.5 in August. This is still well above the 50 mark that divides growth from contraction.

Simon Barry (Ulster Bank chief economist, Republic of Ireland) said that the figures continued to show strong growth in the building sector.

“The headline PMI did ease back for the fourth consecutive month, but this is an unsurprising development, following the exceptionally and unsustainably rapid growth rates recorded, as the sector snapped back following its post-lockdown reopening,” he commented.

Cost inflation close to record levels

The biggest increase in activity came in the housing sector, while commercial building also recorded a sharp rise. Activity in the civil engineering category, however, fell for the second month running.

The survey again picked up reports of ongoing supply-side challenges, partly linked to the pandemic, and to Brexit, said Barry.

The economist said that firms reported difficulty in sourcing materials and staff, with the rate of cost inflation remaining near record levels last month.

Despite these issues, firms appeared confident about the outlook, with the sentiment part of the index again above its long-term average levels.

“Just under half of all respondents anticipate activity gains in the coming year, with optimism linked to expectations that the ongoing release of pent-up demand will continue to support growth,” said Barry.