Ireland‘s construction sector showed a return to growth in February, following a nine month period of reduced activity, the latest AIB Ireland Construction PMI has found.
According to the data, the seasonally-adjusted AIB Ireland Construction Total Activity Index moved back into positive territory in February, rising to 52.1, compared to 48.6 in January.
Housing and commercial projects
This increase was driven by renewed expansions in both housing and commercial projects during the month, while a sharper increase was observed in commercial activity, which displayed ‘solid’ growth.
A rise in housing activity was also observed for the first time in ten months, however civil engineering activity continued to fall, albeit to the lowest extent in the past ten months.
The rise in activity was also driven by improved demand conditions, according to the study, with new orders increasing for the third successive month, marking the fastest rate of growth since February 2022. Employment in the sector also increased modestly, extending a four-month period of jobs growth.
Input costs also continued to rise, however, with construction firms continuing to face ‘sharply rising’ input costs. Elsewhere, supplier delivery times continued to lengthen, linked to factors such as courier shortages and congestion at Dublin port.
Sectoral growth
“The sectoral breakdown indicates that growth was driven by two of the three sub-sectors,” commented John Fahey, AIB senior economist. “The best performing of the three was commercial activity. It registered its first expansion in four months and at its highest level since the end of the first quarter of 2025. Meanwhile, the residential sector returned to growth for the first time in ten months, albeit the pace of expansion was marginal.
“Elsewhere, civil engineering retained its position as the weakest of the three sub-sectors, although the rate of contraction eased for the third consecutive month.”
Fahey also noted that underlying details in the February report show “further signs of encouragement” for the construction sector, “The new orders index, which is viewed as a leading indicator, posted its third successive month of expansion, with the pace of increase at its fastest in four years. Against the backdrop of expanding activity levels and an improving pipeline of projects, construction firms increased their staffing levels for the fourth month in a row.
“Meanwhile, Irish construction firms continued to hold an optimistic view on the prospect of increasing activity levels over the coming 12 months, albeit the strength of sentiment in this regard did ease compared to January.” Read more here.
