Home building in Ireland slowed once again in January for the ninth month in-a-row, according to the latest AIB Construction Purchasing Managers’ Index (PMI).
Their latest report shows that construction industry made a sluggish start to the year across all three divisions: housing, commercial and civil engineering.
The index registered 48.6 in January. Any reading below the benchmark 50 signals contraction, while a result above that figure indicates growth.
John Fahey, AIB senior economist, noted that home building “extended its current period of contraction to nine months, with the pace of decline worsening compared to the previous month”.
The best performing division was commercial building, which includes factories, offices and other such construction, according to Fahey.
Civil engineering, which includes big State-funded infrastructure projects, was the worst performing of the three, according to the index.
However, the Department of Housing, Local Government and Heritage, responded that the 36,284 new dwellings completed in the Republic in 2025 marked the best year for residential building since 2011.
Those figures, published recently by the Central Statistics Office, also highlighted that apartment construction grew in 2025, turning around a decline during the previous year, said the department.
In addition, the Banking Payments Federation of Ireland reported last month that the number of mortgages taken out by Irish people last year was up 8% on 2024. This was “another promising indicator”, the department argued.
Mr Fahey noted that the PMI showed new orders growing for the second consecutive month, with the pace of increase at its fastest since March last year. That news was encouraging, the economist added.
“There was also a further increase in staffing levels in the sector, with the current period of job creation extending to three months,” said Fahey.
Builders are optimistic that business will increase in coming months, according to the report, which the bank will publish today.
The Department of Housing said the new orders and employment figures were leading indicators.
“There are many pointers to progress but we are not complacent,” said its statement.
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