Contracting construction market in Northern Ireland


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Construction activity in Northern Ireland contracted in July. The Ulster Bank PMI for business activity tied construction activity at 48.9, down from 51 in June. Any number below 50 indicates diminished activity, while above 50 indicates growth. The chief economist at Ulster Bank in Northern Ireland, Richard Ramsay, said the construction industry in Northern Ireland “has seen its performance go in the opposite direction”. Reasons for negative performance in construction activity were cited as sharp cost increases and supply chain difficulties. The index recorded a “declining confidence” in the construction industry. “Output, new orders and employment in the construction industry all contracted in July with very sharp rates of decline in the levels of incoming work and employment,” Ramsey said. He predicted, based on PMI trends, that construction activity would decline within 12 months. The construction industry showed the highest rise in input prices at 92.7, but other sectors – manufacturing, retail and services – didn’t lag far behind, touching the 1990s. But these three saw continued growth in July. Three of the four broad sectors saw an expansion of activity led by manufacturing. The report indicated that construction was the only category that experienced a decline in activity. Setting the broader UK context for July 2021, private sector inflation rates at Ulster Bank in Northern Ireland were higher than in any other UK region. Last month, it was reported that delays in delivery dates exacerbated material shortages. This is due to the paperwork and bureaucracy around the Brexit process. As part of the Brexit deal, the UK and the EU negotiated the Northern Ireland Protocol, which kept Northern Ireland within the EU’s single market for goods.


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