The Irish construction sector showed renewed growth in the first quarter of the year, with a ‘sharper rise in new business’ leading to an expansion in activity, according to the latest AIB Ireland Construction PMI report.
Employment and purchasing activity in the construction sector was also up, the data showed, however the pace of input cost inflation quickened to the fastest rate in two years.
‘Upward momentum’
“The AIB Irish Construction PMI survey for March indicated that the sector had some upward momentum at the end of the first quarter,” commented John Fahey, AIB senior economist.
“The headline index rose to 53.9. This represented a significant improvement on the 48.7 reading registered in February. It is also the first time since December of last year that the index is back above the key 50 level, consistent with an expansion in activity.”
Increase in new orders
According to construction businesses, a rise in new orders amidst improving customer demand has led to the increase in activity. New orders grew at the quickest rate since July 2024, the data indicated.
All three main construction sectors registered positive movements in the period, with commercial activity seeing its fastest expansion since March 2022. Housing activity grew for the seventh month in a row, while civil engineering showed signs of stabilisation following three months of contraction.
“From a sectoral perspective, the improvement in activity levels was relatively broad-based,” Fahey added. “Of the three sub-sectors, commercial activity was the best performing, expanding at its fastest pace in three years. The residential sector recorded its seventh consecutive month of growth, and at a slightly quicker rate compared to February. Elsewhere, while civil engineering retained its position as the weakest of the three sectors, it stabilised in March, ending a three-year period of contraction.
“There were also some promising signs emanating from the new orders index, which is considered a key leading indicator. […] Construction firms attributed the expansion in part to starting some projects which 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.
“Construction firms remained optimistic on the prospect of increasing activity levels over the coming 12 months. However, sentiment in this regard was at it lowest level since November 2023.” Read more here.
