Ireland Not Alone In Building Slump, Says Economist

Building activity in Ireland took another dip last month, bringing the lack of new projects to an all time low.

The fall has been blamed on the ongoing international credit crisis, coupled with the current recession in the domestic economy.

However, according to a top economist, Ireland is not alone in bearing the brunt of the slump.

"A similar pattern was evident across Europe and the composite construction index for France, Germany, Ireland, Italy and the UK also reached a record low in December. We are not unique," said Ulster Bank Chief Economist Pat McArdle.


"The UK housing index is now quite close to the Irish one, having begun to fall much later but rapidly catching up while both France and Italy are also below 30. German new house construction is holding up better but is still well below 50 - ie contracting - as indeed it has been for most of the past decade," he said.

The Ulster Bank Construction purchasing managers index (PMI) at 27.4 hit a new low in December.

In December 2007 the reading was 35.7 while the December 2006 was almost 20 points higher, at 54.7.

Mr McArdle said: "Irish housing and commercial activity reached record lows, while civil engineering declined significantly. Input prices also fell at a record pace, with only a few items rising in price."

The sharpest declines were recorded in the residential sector.

Commercial activity also fell at a series-record rate in December.

New business levels in the industry have continued to decrease since April 2007.

The survey also showed Irish construction firms continued to cut jobs last month.

(PR/JM)