- Housing activity broadly stable in February
- Firms take on extra staff amid rising confidence
- Sharpest increase in input prices for six months
The headline seasonally adjusted BNP Paribas Real Estate Ireland Construction Total Activity Index rose for the third month running in February, posting 47.4 from 45.9 in January. Although continuing to signal falling construction output, the rate of decline implied by the latest data was the least marked in five months.
Of the three categories of construction covered by the survey, the best performer in February was residential where activity neared stabilisation and decreased to the least extent in almost a year-and-a-half. The pace of reduction in commercial activity also softened and was the least pronounced in four months.
Hopes that new orders will return to growth over the coming year supported a jump in confidence regarding the 12-month outlook for construction activity. Sentiment hit a two-year high as close to 40% of respondents predicted an increase. Signs of improvement in demand and confidence in the outlook for the coming year supported continued improvements in workforce numbers in February. Employment increased for the third month running, and at a solid pace. A number of firms reported having taken on new staff on a full-time basis.
Our ‘Marketing to Ireland’s Construction Market’ section includes details of principal contractors, housebuilders, architects and other specifiers. The feature also provides details of key media channels and the full data can be downloaded in MS Excel database format. Access now via the Directory page.
Meanwhile, firms purchasing new inputs were faced with lengthening supplier lead times and increasing prices. Vendor performance deteriorated amid delays due to the disruption in the Red Sea and staff shortages at suppliers. Meanwhile, the rate of input cost inflation quickened to the fastest since August last year.
Comment Commenting on the latest survey results, John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland, said, “Residential activity has now been contracting for 17 straight months. This appears to jar with the strong upward trend in both housing commencements and completions. But there are two explanations. Firstly, the acceleration in completions has outstripped the acceleration in commencements; Nearly 3,600 more units have been finished than started over the last 18 months, and this has naturally dragged on onsite activity. Secondly, probably due to continued uncertainty about the economy and construction costs, there has been a slowdown in home improvement activity.
“At this early stage it looks like the rapid growth in housing completions over recent years could stall a bit in 2024. Nonetheless, the continued upward trend in starts bodes well for residential supply over the medium term, and this is reflected in sustained construction sector hiring and the most positive sentiment reading for two years.”
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