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Irish Examiner
2 days ago
- Business
- Irish Examiner
Construction sector records fastest activity decline in almost 18 months
The Irish construction sector recorded a contraction in activity for the second month in a row during June as both housing and civil engineering work saw declines, the latest AIB Ireland Construction Purchasing Managers' Index (PMI) shows. According to the PMI, business conditions in the construction sector remained subdued in June with total activity decreasing slightly again, despite growth in commercial activity. Meanwhile, new orders, employment and input buying continued to rise but at modest rates. The PMI reading for June stood at 48.6 - down from 49.2 in May. A reading of 50 would indicate no change in the sector while a reading below it represents a decline in activity. 'The rate of decline was modest, but the fastest in almost a year-and-a-half… In line with the picture for total construction activity, work on housing projects decreased for the second successive month in June,' the PMI said. John Fahey, senior economist with AIB said the PMI indicated a 'muted performance' for the sector heading into the second half of the year. The latest AIB Ireland Construction Purchasing Managers' Index (PMI) shows work on housing projects decreased for the second successive month in June. File photo: Yui Mok/PA He said the June reading implies a 'quicker pace of contraction in construction activity at the end of the second quarter'. 'Residential construction activity contracted for a second successive month. The pace of reduction was modest, but it did contract at a faster rate compared to May,' Mr Fahey said. 'Meanwhile, civil engineering was, once again, the weakest of the three sub-sectors, with activity contracting for the second month in a row also.' Housing completions The declines in the housing construction sector comes as both the Economic and Social Research Institute (ESRI) and Central Bank of Ireland revised downwards their expected home completions for this year. The ESRI has previously suggested that up to 53,000 new homes a year could be needed by 2030 given the increasing population demands. There were just under 6,000 new homes completed during the first quarter of the year - a slight increase of 2% compared to the same period in 2024. Further measurements Commercial construction activity was the only source of growth in the sector last month which increased for the fifth month running, and at the same solid pace as in May. In the areas that saw a decline in activity, firms reported this was linked to economic uncertainty and muted demand conditions. On the other hand, some firms noted that new contracts had been secured. New orders increased for the fifth consecutive month while employment also rose slightly in June but at the slowest pace in the current four-month sequence of job creation. 'According to respondents, new staff were hired in order to help fulfil orders and work on future projects,' the PMI said. Input costs for the sector also increased during June but at the slowest pace in five months. In its outlook, the PMI reported that firms in the construction sector were optimistic that activity will increase over the coming year particularly in the area of housing. 'That said, concerns around geopolitical issues and economic uncertainty meant that optimism eased to a three-month low. As well as raising employment, firms also expanded their purchasing activity and increased their usage of sub-contractors,' the PMI said.
Yahoo
10-03-2025
- Business
- Yahoo
Sterling extends drop versus euro after German fiscal boost
By Samuel Indyk LONDON (Reuters) - The pound extended a slide against the euro on Thursday, dropping to its weakest level since January as the single currency benefited from an improving growth outlook after Germany announced plans to massively boost fiscal spending. Sterling was last at 83.85 pence per euro, down about 0.2% on the day. It's dropped about 1.5% this week, and is on course for its biggest one-week fall since January 2023. "It's all to do with the broad-based euro optimism that we've seen with this shift in fiscal policy in Germany," said Kirstine Kundby-Nielsen, FX analyst at Danske Bank. On Tuesday, the parties looking to form the next government of Germany, Europe's largest and the world's third largest economy, agreed to loosen fiscal rules and create a 500 billion euro special fund to boost infrastructure. That sent the euro surging against major peers and pushed bond yields higher on expectations for more borrowing. Major investment banks have been quick to lift their growth forecasts for Germany and the euro zone bloc, while some now expect fewer interest rate cuts from the European Central Bank. The ECB announces policy later on Thursday and is widely expected to lower its deposit rate by 25 basis points, the sixth reduction in the easing cycle. Bank of England rate setters, meanwhile, are generally sticking to their "careful" approach to interest rate cuts, having lowered borrowing costs for the third time since August last month. Against the dollar, the pound was down 0.1%, having earlier risen to its highest in four months at $1.2924. Britain's construction sector contracted sharply last month, a survey showed on Thursday. The preliminary reading of the S&P Global/CIPS UK Construction Purchasing Managers' Index fell to 44.6 last month from January's 48.1, its weakest level since May 2020. "Rocketing uncertainty around global trade policy, rising materials prices, and the looming payrolls tax hike in April all conspired to further sap confidence," said Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics. The all-sector PMI, which combines services, manufacturing and construction, fell to a 16-month low of 50, down from 50.3 in January. Sign in to access your portfolio
Zawya
06-03-2025
- Business
- Zawya
Sterling extends drop versus euro after German fiscal boost
The pound extended a slide against the euro on Thursday, dropping to its weakest level since January as the single currency benefited from an improving growth outlook after Germany announced plans to massively boost fiscal spending. Sterling was last at 83.85 pence per euro, down about 0.2% on the day. It's dropped about 1.5% this week, and is on course for its biggest one-week fall since January 2023. "It's all to do with the broad-based euro optimism that we've seen with this shift in fiscal policy in Germany," said Kirstine Kundby-Nielsen, FX analyst at Danske Bank. On Tuesday, the parties looking to form the next government of Germany, Europe's largest and the world's third largest economy, agreed to loosen fiscal rules and create a 500 billion euro special fund to boost infrastructure. That sent the euro surging against major peers and pushed bond yields higher on expectations for more borrowing. Major investment banks have been quick to lift their growth forecasts for Germany and the euro zone bloc, while some now expect fewer interest rate cuts from the European Central Bank. The ECB announces policy later on Thursday and is widely expected to lower its deposit rate by 25 basis points, the sixth reduction in the easing cycle. Bank of England rate setters, meanwhile, are generally sticking to their "careful" approach to interest rate cuts, having lowered borrowing costs for the third time since August last month. Against the dollar, the pound was down 0.1%, having earlier risen to its highest in four months at $1.2924. Britain's construction sector contracted sharply last month, a survey showed on Thursday. The preliminary reading of the S&P Global/CIPS UK Construction Purchasing Managers' Index fell to 44.6 last month from January's 48.1, its weakest level since May 2020. "Rocketing uncertainty around global trade policy, rising materials prices, and the looming payrolls tax hike in April all conspired to further sap confidence," said Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics. The all-sector PMI, which combines services, manufacturing and construction, fell to a 16-month low of 50, down from 50.3 in January. (Reporting by Samuel Indyk Editing by Bernadette Baum)
