Construction activity was flat for the second month in a row in August, according to the latest Purchasing Managers’ Index from BNP Paribas Real Estate Ireland.
The construction PMI showed a reading of 50 – the no-change mark – and which was broadly in line with the figure of 49.9 posted in July.
The latest index showed a very slight contraction in housing activity, while commercial activity expanded.
Input costs continued to rise sharply in August and BNP said the rate of inflation remained above the series average despite easing to a three-month low.
Building companies reported general material price increases, as well as higher charges from sub-contractors.
Meanwhile, employment levels fell for the first time in eight months – though demand for builders remains high, with wages up 11.7% year on year.
John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland, said that construction employment has been on an almost unbroken upward trend since the economy re-opened after Covid.
“However, for only the second time in 20 months, hiring went into reverse in August. This triangulates data from the recent Labour Force Survey which indicated a fairly pronounced pull-back in
construction employment,” he said.
“Paradoxically, there does not appear to be any lack of demand for builders – wage growth in the sector has gone from -2.2% per annum one year ago to 11.75% currently, which suggests intensifying
competition to recruit scarce workers,” he said.
“Likewise today’s PMI indicates that order books are expanding and the vast majority of building firms expect to be at least as busy this time next year. Therefore taking everything in the round, the data suggest that the sector may now be encountering labour constraints,” he added.
Article Source – Construction PMI flat for second month in a row in August – RTE
