26th May 2017
Author: Ann Morgan, CEO - Murdock Builders Merchants
Welcome to the first Murdock blog.. I hope you enjoy, and come back for the next one!!
How bad was that?
Nobody in the construction industry will need reminding, for at least a generation, as to how awful the recession was. Well over 250,000 jobs were lost and depending on whose figures you rely on we went from building nearly 90,000 houses a year to possibly only 3,000 houses. That’s some collapse.
Things are looking good
The good news, though, is that not alone are things very definitely on the up, but according to a commentary from Merrion Capital, their analysis of the Ulster Bank Construction Purchasing Managers Index - PMI - (basically the views of those in construction who do the buying), the growth in building activity continues to accelerate. In fact, this month’s PMI is at its highest since last October.
Getting better all the time
Sometimes referred to as a Health Barometer, the PMI is at 61.3. Anything above 50 is good because things are getting better. New business orders and staff hiring levels expanded at sharper rates than previous months and overall rising activity levels led building firms to increase their own purchasing at the fastest pace on record.
44 months of growth
Residential construction remains an area of particular strength with housing activity accelerating further to become the strongest activity category in April. The further rise in employment levels meant hiring has increased for 44 straight months. Now, that’s some comeback.
30,000 houses needed, every year
Of course, the gloom merchants are bound to make an appearance, telling us that, like the last time, it’ll all end in tears. However, it’s my view that we’re at least five years away from seeing any slowdown. We need to build 30,000 new houses every year for the next five years just to stand still. No one company, or even a group of construction companies, can handle that volume.
Your country needs you
That means we’ll be relying, as well, on smaller builders, building one to ten units, to make up some of the slack. If we stretch that five years horizon just a little, that’s enough work to see at least one of the children start and finish secondary school. That’s the kind of outlook we can all relate to. What happens after that, who knows.
But for now, keep on building as fast as you can.