Construction activity rose in March – the first increase in total activity in three months – amid stronger new order growth, the latest Purchasing Managers Index from AIB shows.
The AIB Ireland Construction Total Activity Index moved back above the 50 no-change mark in March to reach 53.9, up from 48.7 in February, marking the strongest level for three years.
Companies said that rising new orders amid improving customer demand had been behind the increase in activity last month.
The strongest increase was seen iin commercial activity, which rose sharply and to the largest extent since March 2022.
Housing activity expanded for the seventh month in a row, while civil engineering activity broadly stabilised after a sustained period of reduction.
AIB also noted that the start of new projects led building companies to increase staffing levels in March, following a fall in February. But the use of sub-contractors decreased, ending a six-month sequence of growth.
Today’s survey also showed that the rate of input cost inflation quickened for the second month in a row and was the steepest for almost two years.
Despite the generally improving picture in March, AIB said that business confidence continued to trend downwards, dropping for the third consecutive month to the lowest since November 2023.
While success in securing new orders supported optimism, construction firms expressed concerns about a possible slowdown in the wider economy and uncertainty regarding US trade policy.
John Fahey, AIB’s senior economist, said that this month’s PMI is the first time since December of last year that the index is back above the key 50 level, consistent with an expansion in activity.
“There were some promising signs emanating from the new orders index, which is considered a key leading indicator. Orders expanded for the fourth time in the past five months and at its sharpest pace since July 2024,” the economist said.
He said that 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,” he said.
But he noted that sentiment in this regard was at it lowest level since November 2023.
Article Source – Construction activity rises amid stronger new order growth – AIB PMI – RTE
