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Building activity stabilised in July – survey

A survey of the construction industry indicates that activity in the sector stabilised in July, helped by another strong increase in the housing sector.

The BNP Paribas Real Estate Ireland Construction Purchasing Managers' Index (PMI) recorded 49.9 – up from 47.5 in June and only just below the key 50 mark. Any figure below 50 means that activity fell.

BNP Paribas said that housing activity (53.2) increased for the fifth consecutive month, and at the fastest pace since April. Commercial activity (49.9) was broadly unchanged after a sharp reduction in June.

New orders surge

The survey also recorded a marked expansion in new orders – the figure of 54.9 was the highest since February 2022. New business has now risen in five successive months.

Companies responded to higher workloads by taking on additional staff – the eighth consecutive month of increases. BPN Paribas pointed out, however, that the rate of job creation was “only marginal”.

Costs for firms rose sharply, with the pace of inflation remaining above-average, despite easing slightly from that seen in June.

Target

Despite the positive figures for residential construction, John McCartney (director and head of research at BNP Paribas Real Estate Ireland) said that it would be “quite challenging” to hit a Government target of 33,450 completions this year.

“New dwelling completions fell by 8.6% in H1. This means 20,700 units need to be delivered in the second half for the Government’s target of 33,450 completions to be met – an 11% increase over H2 2023,” he stated.

McCartney added, however, that housing starts had picked up sharply in recent months, and the increased activity indicated by the PMI pointed to stronger output ahead – although it might be 2025 before the recent surge brought a material uplift in completions.