Construction falls ease in December

The construction industry continued to contract in December, but there were signs that the decline eased as activity, new orders and employment fell at weaker rates.

The Ulster Bank Construction Purchasing Managers index stood at 43 in December, up from 42.6 in November. December saw the weakest rate of decline since May 2012.

The bank noted that 2012 was the sixth year in a row of contraction in the construction sector.Coincidently, the fall in construction activity coincides with a fall in residential mortgage origination during the same period. However, there are growing signs that a modest recovery may be under way. While 2011 saw the lowest levels of mortgages granted for the purchase of property since 1971, 2012 may be the first year since 2006 where growth finally returns to the sector.The 2012 Q4 mortgage statistics are expected to be completed and released in the coming weeks.

Ulster Bank said that all three monitored sectors saw weaker falls in activity in December compared to November. The residential sector remained the best performing, with that sub-index moving up to 45.8 from 44.2. The pace of decline in commercial activity also slowed with its sub-index improving to 41.3 from 39.8.

Civil engineering activity continued to be the weakest sector and its sub-index stood at 35.2 in December, although this was an improvement from the November reading of 31.1.

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