First increase in construction activity recorded since September of 2022
Construction activity in Ireland increased in June for the first time since September of last year, albeit slightly.
New data from the BNP Paribas Real Estate Ireland Construction Purchasing Managers Index shows new orders and employment both continued to expand during the month.
They also did so at their quickest pace since March.
Inflation also softened during the month, leading to costs increasing at the weakest rates since August of 2020.
“Construction activity rose in June for the first time since last September,” said John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland.
“However, this has been coming for a while, with building firms consistently reporting increased new orders and staffing levels since the start of this year.”
“The pick-up reflects two factors; Firstly, cost pressures have retreated to their lowest level for 35 months.”
“Secondly, population growth, the strong economy, Government supports and increased demand for green buildings continue to underpin the value of newly constructed properties – particularly new homes and warehouses.”
Members of the survey panel reported that the demand environment had become more favourable and this led to the construction workforce growing for the sixth month in a row, even though it was modest.
Commercial activity drove the overall increase in activity.
Housing activity on the other hand edged lower, albeit at its softest pace since October 2022.
“Residential activity edged lower for the ninth successive month, but the rate of contraction continues to diminish,” said Mr McCartney.
“Viability remains challenging, particularly for apartments. However, new homes inflation of 11.1 percent per annum (compared with 3.5 percent for second-hand dwellings) is helping to offset the impact of rising costs, and we expect 30,000 completions this year.”
Overall Irish building firms are still broadly optimistic and foresee increased activity levels over the coming year.
However, confidence was still below its long-term average and at its joint-weakest in the year so far, due to inflation worries.