Only commercial building – offices, factories, warehouses and other business premises – bucked the trend, rising to 51.9 in March, indicating that it is the one sector of the construction industry seeing increased activity.
However, the index is showing signs of a turnaround for builders. Companies interviewed for the survey said new orders had risen for the third month in a row. They said they had responded by hiring new workers and stepping up the purchase of building materials, BNP said.
Inflation, which has hindered the industry for more than two years, continues to be a concern but the rate of price increases slowed in March.
Similarly, builders continued to deal with supply squeezes that have been a problem since Covid curbs rowed back two years ago, though BNP notes that this also improved last month.
John McCartney, the bank’s director and head of research, highlighted three trends from the first three months of the year.
“Firstly, overall construction activity contracted, but marginally, and at a diminishing rate through the quarter,” he said.
“Secondly, input cost inflation slowed markedly. Thirdly, every forward-looking indicator on the PMI dashboard switched from negative to unambiguously positive.”
Mr McCartney noted that order books had strengthened progressively over the opening three months of 2023. Increased hiring and materials purchases mirrored this.
“Meanwhile, the proportion of Irish building firms expecting to be as busy or busier in 12 months time has steadily risen from 82 per cent last December to 87 per cent in March,” he said.
Builders hope to cash in on planned development work and upcoming renewable energy projects over the coming year, the survey found.
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