Ireland's construction sector growth slows in April

Growth in Ireland's construction sector slowed slightly in April, according to new figures on Monday.

BNP Paribas Real Estate's construction total activity index for Ireland dropped to 52.5 points in April from 53.9 points in March. This is closer to the 50-point ‘no-change’ market that separates growth from contraction, showing growth slowed in the month.

‘Although continuing to signal an increase in construction activity, the reading dropped for the second month running and pointed to the weakest rise in the current one-year sequence of expansion. Some companies reported catching up on backlogs of work, but price rises and subdued demand acted to restrict growth,’ BNP Paribas noted.

Notably, the companies surveyed reported the second-highest rise in input prices since data started being collected in June 2000. New orders declined for the first time in 12 months.

Housing continued strongly into April, despite increased headwinds, and Commercial activity also showed solid expansion. In contrast, civil engineering showed contraction for the second month in a row, as rising energy and material prices deterred contractors from taking public works contracts.

The survey is based on responses sent to a panel of around 150 Irish construction companies, with data collected between April 11 and 28.

‘The index of construction output in Q4 2021 was still 6.3% below its pre-pandemic level in Q4 2019. It appears a degree of catch-up has taken place in Q1 2022, with housing completions of 5,669, up 45% on the year, and housing starts accelerating to 34,800 units in the year to March,’ commented Davy Research.

‘Hence, our forecast was for construction output to grow by 15% in 2022. Of course, the PMI survey still points to an expansion in activity, albeit at a slower pace and with cost pressures hurting the delivery of public capital projects.’

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