Home building slowed in May, continuing a decline dating back to last autumn, according to the latest BNP Paribas Real Estate Purchasing Managers’ Index (PMI).
The latest report shows the index was was still below the crucial 50 mark at 49.4, the eight consecutive month that activity fell.
It found that housing activity slowed more sharply than the rest of the Irish building industry in May.
The May reading for the overall industry was 49.4. The index takes 50 as its benchmark, with any number below that indicating a slowdown on the previous month, and any figure above it showing growth.
Housing Activity slid to 43.9 in May, the eighth consecutive month that residential building declined, the index shows.
Costs continued rising in May, but John McCartney, director and head of research at BNP Paribas Real Estate Ireland, pointed out that they did so at their slowest rate since August 2020.
He said that this, combined with ongoing demand and increased new orders, “is giving rise to greater optimism about construction viability”.
"The pattern of recent months continued in May," said Mr McCartney.
"Onsite activity levels are broadly unchanged. However, building firms are ramping-up to be busier."
Purchasing activity and new orders were up for the fourth month in a row, while employment rose for the fifth straight month.
"The future expectations index is now approaching its highest level since early 2022, possibly driven by two factors," said Mr McCartney.
"As confirmed by recent Census statistics, Ireland's population continues to rise strongly, generating a natural demand for homes and logistics buildings which serve the supply-chain needs of a growing population."
"Secondly, while still rising, input costs are doing so at their slowest rate since August 2020. The combination of these dynamics is giving rise to greater optimism about construction viability."
