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Construction activity picked up in March

Activity in the Irish construction sector rose for the first time in three months in March, according to a monthly survey. 

The AIB Ireland Construction PMI recorded 53.9 – a significant improvement on February’s 48.7 and the strongest number for three years.  

Any figure above 50 indicates growth. 

Companies indicated that rising new orders, amid improving customer demand, had been behind the increase in activity.

Commercial sector leads growth 

All three categories of the sector showed growth, with commercial activity rising to 56 – the highest figure since March 2022. 

Housing (53.5) expanded for the seventh month in a row, while civil engineering (50.1) edged into growth after a long period of falls. 

John Fahey (AIB senior economist) said that construction firms attributed the expansion partly to starting some projects that had previously been on hold. 

“Meanwhile, the sector saw a return to jobs growth last month, as firms increased staffing levels in response to new business,” he added. 

Fahey stated that construction firms remained optimistic on the prospect of increasing activity levels over the coming 12 months. 

Trade uncertainty, however, meant that the sentiment figure in March was at its lowest level since November 2023. 

Home prices up 8.1% 

Separate figures from the website MyHome.ie showed that asking prices for homes rose by 8.1% in the year to the first quarter (Q1) of 2025.  

Prices were up by 1.7% compared with the final quarter of last year. 

First-time buyer mortgage drawdowns rose to 26,200 in 2024 – their highest level since 2007; mover drawdowns, however, fell to just 9,000 loans, which is 20% below pre-COVID levels. 

MyHome.ie said that just 10,800 homes were available for sale on its website in March 2025 – a new record low. 

Risks from tariff war 

The report’s author Conall MacCoille (Bank of Ireland chief economist) said that record-low supply and continued surging demand were still driving the property market. 

In the absence of a trade war, the economist said that the bank’s current forecast of 5% inflation for this year “may even prove to be conservative”. 

He added, however, that what he described as Ireland’s “relatively thin, illiquid housing market, reliant on those at the top of the income distribution” could be exposed to a sudden negative economic shock, such as the risk of a US-EU tariff war.