Irish construction activity increases for first time in almost a year

Construction activity in Ireland increased last month, the first increase since September 2022.

New data from the BNP Paribas Real Estate Ireland Construction Purchasing Managers Index shows sustained and quicker growth in new orders and employment during June. 

The growth in June did so at the fastest rate since March. Meanwhile, inflationary pressures in the sector continued to cool, with the weakest rise in input costs since August 2020.

Irish building companies remain broadly optimistic and foresee increased activity levels over the coming year. Growth prospects centre around general hopes for a boost in demand.

That said, BNP Paribas Real Estate Ireland notes the confidence index remained below its long-term average, and at its joint-weakest in the year so far, with firms still concerned about the inflationary environment.

Commenting on the latest survey results, John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland, said: “Construction activity rose in June for the first time since last September. 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.

“Residential activity edged lower for the ninth successive month, but the rate of contraction continues to diminish. 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.”