Construction activity in Ireland continued to increase during April, but the slowest increase in activity was on housing projects, according to AIB.
The bank’s Construction Total Activity Index posted 52.4 for April, down from 53.9 in March. This indicates a slowdown in activity but was still above the 50 mark, which signals growth in the month.
AIB said the slowest increase in activity was on housing projects (at 51.7), but growth has now been sustained in the residential category for eight months running.
Employment and purchasing activity increased, while companies remained optimistic regarding the year-ahead outlook, despite some worries regarding the impact of US trade policy.
On the price front, firms recorded a further sharp rise in their input costs during April.
Those firms that saw construction activity increase linked it to improving customer demand and an associated increase in new orders.
Indeed, new business expanded for the third successive month in April, with the solid pace of growth little-changed from that in March.
The rise in construction activity was broad based. The fastest increase was in commercial activity, which expanded for the third month running and at a solid pace, albeit one that was softer than in the previous survey period.
Civil engineering activity, meanwhile, rose at the fastest pace since February 2022. The slowest increase in activity was on housing projects, but growth has now been sustained in the residential category for eight months running.
With new projects getting underway, construction firms again felt the need to hire additional workers in April.
Employment rose for the second month running, and at a slightly stronger pace than in March. The usage of subcontractors also increased, following a first fall in seven months in the previous survey period.
April also saw sustained growth of purchasing activity, while suppliers’ delivery times lengthened as staff shortages meant that vendors struggled to keep up with rising demand for inputs.
Improving demand for materials often resulted in suppliers hiking their prices in April, with the rate of input cost inflation remaining sharp and above the series average during the month. Sub-contractor rates also increased rapidly, and at the fastest pace for a year.
Hopes for improving economic conditions and further inflows of new orders supported confidence in the 12-month outlook for construction activity.
Sentiment picked up from that seen in March, but remained weaker than the series average amid some nervousness about the potential impacts of US trade policies. Around one-third of respondents expressed an optimistic outlook, while 11 per cent were pessimistic.
