The rate of construction across the country rebounded last month following a slow start to the summer.
That’s according to the latest purchasing managers’ index from AIB.
The seasonally-adjusted reading for total activity in the sector hit 53 in July - up sharply on the 45.4 reading recorded in June and comfortably above the 50 marker that separates growth from contraction.
The PMI records the monthly changes in the volume of construction undertaken nationally and shares findings on the results compiled by a questionnaire of about 150 companies.
The report said the July data signalled a broader improvement in construction, with activity now rising for four consecutive months.
It found that companies were continuing to hire staff, while confidence had improved modestly.
Activity was also boosted by a softening in inflation and supply-chain pressures.
All three areas within the construction industry monitored by the PMI – housing, commercial and civil engineering projects – witnessed growth last month, although to varying degrees.
Housing saw slight growth, recording a figure of 50.5 on the index, which is linked to “improved customer demand”, AIB said. “The rate of expansion was only slight, however, amid reports of a scarcity of tender opportunities.”
Civil engineering projects, such as State-sponsored infrastructure of water supplies, electricity grids, road networks and public housing recorded growth, with 51.7 on the index.
This is the first month of growth within the sector since April 2025, following a worrying result of 42.7 last month. Builders blamed a rapid increase in oil prices and a sudden slowdown in raw material supplies as a result of the closure of the Strait of Hormuz in February, AIB said last month.
Despite this, John Fahy, a senior economist at AIB, said: “The sector continued to add jobs, with employment levels rising for a ninth month in a row and at a slightly quicker pace compared to June.”
Speaking on the PMI results more broadly, he said: “The sector started the third quarter with some renewed momentum.
“The best-performing of the three, and main driver of the expansion, was commercial” activity, he said, which “returned to growth after contracting for the first time in five months in June."
Commercial construction, the sector that includes the building of factories, shopping centres and other business premises, recorded a result of 53.6, a “solid” increase from 46 the previous month.
Construction firms continued to increase their workforces, a trend witnessed since November last year, and “also expanded their use of subcontractors, and at the joint-fastest pace in almost 3½ years," AIB said.
“Purchasing activity was broadly stable, following a solid fall in the previous month. While some firms increased input buying in response to higher new orders, others indicated that their holdings of materials were sufficient to support current requirements,” AIB said.
Confidence within business also improved, following a recent low in April, coming in at a four-month high. However, this is “still below the level seen prior to the outbreak of war in the Middle East," AIB noted.
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