Gurdgiev | PMI “a bit bubbly, a bit bonkers…”

by Bregs Blog admin team


As readers of the BRegs Blog are aware we are keen followers of Dr. Constantin Gurdgiev’s blog “True Economics” as he gets beyond spin and anecdote on topics into actual hard facts and figures. Link to: True Economics 14/11/2014: Irish Construction Sector PMIs: A Bit Bubbly, A Bit Bonkers…

In his latest post from True Economics November 14th 2014 he suggests that Ulster Bank’s PMI indicator is, in fact, a contrarian indicator of construction activity: the higher the reading, the lower the construction activity.


Irish Construction Sector PMIs: A Bit Bubbly, A Bit Bonkers…

Posted by Dr. Constantin Gurdgiev

Ulster Bank and Markit published Construction PMI for Ireland, and the numbers signal huge uplift in activity across all sub-sectors, excluding Civil engineering. However, Civil Engineering post an above 50 reading (albeit consisted with virtually no growth) for the first time since Q1 2006.

So here we have it:

Screen Shot 2014-11-14 at 18.28.37


“…All of which suggests we should be seeing a massive boom. Of course we are not. Why? Because the levels from which the activity is rising are… well, microscopic.”


It is worth remembering that Construction Sector PMIs seem to have little bearing to the reality in the sector activity on the ground as shown below, so it is worth taking these numbers with a grain of salt.3

Just how bonkers is the above PMI data? Or just how much salt to be used with that fish:


Other posts of interest:

Ronan Lyons | Regulations pushing up the costs of homes

Sunday Business Post | Karl Deeter “Building regulations – rules don’t deliver results”

Gurdgiev: Irish Residential Property Prices: Q3 2014

CSO- Dwelling units approved down 16.6% in one year

Want to live in Dublin? | Only the wealthy need apply!

World Bank Report 2015 | UK v Ireland the real cost of “Dealing with construction permits”

Residential construction down in 2014 Q1+ Q2: (CSO statistics)

Commencement Notices – Update | 22 October 2014

A ‘perfect storm’ for housing? 

Karl Whelan: “…raft of cost-increasing building regs are at least partly responsible”

Construction Recovery- watch this space

‘Recovery’ is Still Worse than the 1980s Crisis

CSO: (Q1 2014) planning permissions for dwellings -30% drop