Michael McGrath (Cork South Central, Fianna Fail)
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117. To ask the Minister for Finance his views on the fall in construction activity, as highlighted by the February purchasing managers' index figures; his further views that this is related to the recent introduction of rules relating to mortgage lending; and if he will make a statement on the matter. [11026/15]

Michael Noonan (Limerick City, Fine Gael)
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I am aware of the recently released Purchasers Managers Index (PMI) figures for February. The PMI for February 2015 reported a figure of 52.0 for total activity in the construction sector. As any reading in excess of 50 indicates expansion, the index points towards a slight increase in activity compared to January 2015. However, while the index indicates that the sector is expanding, the rate of expansion has slowed compared with previous monthly surveys.

The index is composed of three sub-sectors: housing; commercial; and civil engineering.  While the three sub-sector indices were weaker than the previous month, only the civil engineering sub-sector contracted in February. As the Central Bank's macro prudential mortgage rules apply only to residential mortgage lending, this suggests that the weaker PMI figure for February is not being driven by the mortgage lending rules.

The PMI data should not be viewed in isolation.  The underlying trend has been one of recovery in the construction  sector. Indicators such as the most recent Quarterly National Household Survey from the Central Statistics Office show a year-on-year increase in construction sector employment of 13,000 in the final quarter of 2014. 

As the Deputy will be aware, Construction 2020 is the whole-of-government strategy to address issues that might impede the proper functioning of the property market, and aims to support increased supply in the wider housing market. The Strategy involves ensuring that any critical bottlenecks that might prevent the sector in meeting residential and non-residential demand are addressed through 75 individual time-bound actions. For example, last week my Department organised a conference on financing options for construction and development to facilitate dialogue and mutual understanding between developers and debt and equity providers. This will assist in the development of a sustainable financing model for the sector, thereby contributing to enhanced supply over time.