Irish construction activity continued to fall last month, according to AIB’s latest Construction Purchasing Managers Index.
The headline seasonally adjusted figure fell to 45.9 in August, down from 47.1 in July, as firms signalled a renewed reduction in new business activity.
It is the fourth successive month where the Construction Total Activity Index was below the key breakeven level of 50.
The report said output was down across the housing, commercial and civil engineering categories.
Purchasing activity was also scaled back, but AIB said companies continued to increase employment, “in part due to positive expectations for the future”.
The latest PMI also said firms recorded a further sharp increase in input costs and an extension of suppliers’ delivery times.
The report said the latest fall was “marked and the sharpest since January 2024” and for the first time in a year and a half, all three categories of construction saw a drop in activity last month.
“Commercial activity decreased for the first time in seven months, albeit only slightly. Work on housing projects was down for the fourth month running, and at the fastest pace since November 2023, while civil engineering activity also fell at a sharper rate than in July,” it said.
The use of sub-contractors decreased for the second consecutive month, and at a solid pace that was the fastest since November 2023.
AIB Senior Economist, John Fahey, said the Construction PMI survey for August “points to a further loss of momentum in the sector”.
He said the sectoral breakdown of the August PMI “suggests the downturn in activity levels is becoming more broad-based.”
“Indeed, for the first time since February 2024, all three sub-sectors registered a decline in activity,” he added.
“The commercial sector ended a six-month period of expansion, falling back into contraction territory, albeit the pace of decline was relatively mild. Residential construction activity contracted for a fourth consecutive month and at a marginally faster rate compared to July.
“Meanwhile, civil engineering retained its position as the worst performing of the three sub-sectors. It registered a fourth straight month of contraction,” Mr Fahey said.
He said: “On a more positive note, construction firms continued to increase their staffing levels, lengthening the current period of jobs growth to six months.”
He said there were also some encouraging signs from the report’s outlook gauge.
“Firms level of optimism regarding increasing activity levels over the coming 12 months strengthened in August. An anticipated improvement in housing activity supported this uplift in business expectations,” Mr Fahey added.
Article Source – Irish construction activity fell last month – AIB report