Contraction in construction at lowest level since October

February 14, 2024

Construction activity contracted for the seventh consecutive month in January, but by the smallest amount since October.

Housing activity, while reducing further, slowed by the least extent since September, the BNP Paribas Real Estate Ireland Construction Purchasing Managers Index found.

“The relative outperformance of residential reflects the strength of the new homes market where consumers benefit from substantial State subsidies and where average prices are rising by more than 10 per cent per annum,” said John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland.

“With the temporary waiver of development contributions due to expire in April, it will be interesting to see whether the strong momentum in residential commencements during 2023 will continue over the coming months, leading to resumed expansion in the housing PMI.”

The weakening of activity in commercial construction also continued, but was also much softer than before.

“The commercial slowdown is as expected, and understandable in the context of oversupply in office markets particularly,” Mr McCartney said.

New business is expected to improve in the coming months and BNPPRE said this lifted optimism in the outlook for construction activity over the year.

Construction businesses took on more staff in January as they expected demand to improve, the research also found.

It was the second consecutive month that employment in the sector rose and this time at the fastest pace in a nearly a year.

But input costs also rose strongly in the month, even though the rate of inflation eased to a three-month low, BNPPRE said.

Article Source – Contraction in construction at lowest level since October – RTE

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