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‘Positive signs’ despite March construction drop

Activity in the Irish construction sector fell for the sixth month in a row, according to a monthly survey.

The BNP Paribas Real Estate Ireland Construction PMI recorded 49.5 – down slightly from 49.8 in February. Any figure below 50 means that activity weakened.

Despite the drop, the survey showed some positive signs, as new orders, employment, and buying of raw materials rose. BNP Paribas also noted “some tentative signs” of a cooling of inflationary pressures.

According to the report, while some firms commented on still-subdued market conditions, others mentioned some relative improvement in demand.

Housing drops again

There was a sharp fall in civil engineering, which recorded a figure of 46.1, while housing activity (46.5) dropped for the sixth month in a row. Commercial property, however, expanded for the second consecutive month (51.9).

While firms hired more workers in response to an increase in new orders, they continued to report supply-chain issues and delivery delays.

The pace of inflation, while still high, was nevertheless the lowest for more than two years.

John McCartney (director and head of research at BNP Paribas Real Estate Ireland) pointed out that every forward-looking indicator in the PMI had switched from negative to “unambiguously positive” during March.

“The proportion of Irish building firms expecting to be as busy or busier in 12 months’ time has steadily risen – from 82% last December to 87% in March,” he said.