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Irish Examiner
5 days ago
- Business
- Irish Examiner
Construction activity falls for first time in three months
Irish construction firms saw a reduction in activity for the first time in three months during May amid market uncertainty and signs of demand easing, AIB has found. Publishing its latest Ireland Construction PMI, the lender noted that new order growth continued, but the rate of expansion softened to a three-month low. Meanwhile, companies continued to expand their staffing levels, purchasing activity and use of subcontractors. At the same time, on the price front, input costs increased at a similarly rapid pace to that seen during April. The headline seasonally adjusted AIB Ireland Construction Total Activity Index dipped to 49.2 in May from 52.4 in April, posting below the 50.0 no-change mark for the first time in three months and signalling a slight reduction in total construction activity midway through the second quarter. While some firms were able to increase activity, in line with improving customer demand, elsewhere there were signs of softening market conditions and uncertainty, leading to a drop in overall activity. A renewed decrease in housing activity was recorded in May, thereby ending an eight-month sequence of growth. The rate of decline was only marginal, however, and much softer than that seen for civil engineering, which also posted a renewed fall in activity. More positively, commercial activity continued to rise, with the solid expansion broadly in line with that seen in April, AIB noted. The reduction in construction activity in May was recorded despite continued growth of new orders, which increased for the fourth consecutive month. That said, uncertainty around US trade policy contributed to a softening in the pace of expansion to a three-month low. The rise in new orders and the impending start of new projects contributed to positive sentiment regarding the year-ahead outlook for construction activity and led to further increases in employment and purchasing activity. Staffing levels rose for the third consecutive month, AIB said, noting that although modest, the pace of job creation was the strongest since January. The rate of expansion in sub-contractor usage also quickened and was the most pronounced in 2025 so far, the index found. Meanwhile, sub contractor availability decreased to the largest extent since June 2022. 'From a sectoral perspective, commercial activity was once again the best-performing of the three sub-sectors," said AIB senior economist, John Fahey. "It registered growth for the fourth straight month in May and at a similar pace to April. In contrast, residential construction activity contracted, albeit marginally, for the first time in nine months."
Irish Independent
13-05-2025
- Business
- Irish Independent
Construction sector reports another month of increased activity
Housing projects expanded for the eighth consecutive month, according to the AIB Ireland Construction Total Activity Index. Its overall headline figure was again above the no-change mark of 50 last month. The figure of 52.4 for April was slightly down from 53.9 in March, but meant a second consecutive month of growth in Irish construction activity. New business expanded for the third successive month. The fastest increase was in commercial activity, while civil engineering grew at the quickest pace since February 2022. The slowest increase in activity was on housing projects, but there has been growth in the residential category for eight months running. Employment in construction was up last month, and at a slightly stronger pace than in March, while the use of subcontractors also increased. A bigger demand for materials meant that suppliers hiked their prices in April, with the rate of input inflation remaining above average. The growth in purchasing activity also meant that delivery times took longer with vendors having to cope with a shortage of staff. Subcontractor rates also increased, at the fastest pace for a year. John Fahey, senior economist with AIB, said: 'The survey for April showed that the sector had a solid start to the second quarter. The headline index remained above the key 50 level, consistent with a second consecutive month of an expansion in activity. 'Firms attributed the growth in activity to an improvement in demand conditions. This was reflected in new orders expanding for a third straight month, broadly maintaining the pace of growth recorded in March. This backdrop of new projects saw firms continue to increase their staffing levels.' Construction firms are optimistic about increasing activity levels over the next year, although some did mention that there may be a drag due to uncertainty over US trade policy. About one in three firms surveyed were optimistic, with just over one in 10 saying they were pessimistic. The AIB Ireland Construction PMI survey is compiled by S&P Global from responses to questionnaires sent to a panel of about 150 construction firms. Survey responses are collected in the second half of each month, and indicate the direction of change compared to the previous month.
