Irish Construction Sees Sharp Decline in Home-Building, Commercial Growth in May
Irish home-building saw its fastest decline since October in May, scoring 43.2. However, the overall construction PMI returned to growth at 50.2, driven by commercial work. Employment rose for the seventh month, but input prices increased steeply due to fuel costs.
Irish construction companies reported a «sharp rate of decline» in home-building in May, accelerating to its fastest rate since October. AIB's latest PMI report indicated May was the second consecutive month of falling residential building activity, scoring 43.2, below the 50-mark separating growth from contraction.
Despite this, the overall seasonally-adjusted PMI for the construction sector returned to growth, climbing to 50.2 from 47.1 in April. This expansion was centered on commercial work, which saw activity increase sharply to 56.4, its fastest rate in over four years, extending its growth sequence to four months. Civil engineering activity, however, marked its 13th consecutive monthly reduction at 43.1, the sharpest fall since last November.
Employment in the construction sector increased for the seventh consecutive month, with companies hiring staff due to higher new orders. Input prices rose steeply, attributed largely to increases in fuel and oil prices due to the Middle East conflict, with over 57% of companies reporting higher costs. Optimism for the year-ahead outlook improved from April's 41-month low, supported by expectations of further new order improvements, though sentiment remained «relatively muted». The use of subcontractors increased for the sixth successive month, but availability continued to fall.