Construction activity remained steady in May but work on housing projects increased in a positive sign for the Government’s housing targets, according to the latest BNP Paribas Real Estate Ireland index for the sector.
The company’s index for construction activity came in fractionally below the 50 no-change mark “to signal broadly stable output”. This was down from a 53.2 reading in April and ended a two-month sequence of expansion.
Despite the pause in growth seen for total construction activity, work on housing and commercial projects continued to increase in May. In both cases, activity rose for the third month running, but at softer rates than in April.
John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland, said news-flow from the construction sector remained positive in May with continued increases in activity across the key residential and commercial segments.
"The former is no surprise – even looking through disruption which may have been caused by the development contributions waiver deadline in April, housing commencements have been on a sustained upward trend since October 2022," he said.
"On the commercial side, activity has been driven by office construction in Dublin where more space was delivered in Q1 than in the entire of 2023."
The construction index showed new orders continued to rise in May as firms again saw new business come in during the month.
The latest expansion was the third in as many months, albeit slower than in April.
Sustained growth of employment was also recorded, with staffing levels up for the sixth month running in response to higher new orders. The rate of job creation eased, however, to the weakest in this sequence.
Although input costs continued to increase sharply during May amid higher material prices, the pace of inflation eased to a four-month low.
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