Irish Construction Industry Shows Signs of Recovery
Increased PMI Indicates Recovery in Irish Construction Industry
The Irish construction industry is displaying positive signs of recovery, with BNP Paribas Real Estate Ireland’s PMI rising from 44.9 in August to 48.6 in September, according to data from S&P Global. Despite a slight market slowdown, the industry is witnessing a lessened contraction in construction activity, indicating improving demand and stabilization of new orders after a significant reduction during the summer months.
Market Slowdown Causes Contraction in Construction Activity
BNP Paribas’s Construction Activity Index for September reveals a contraction in construction activity, primarily due to a market slowdown. However, there are positive indications of housing activity improvement and significant recovery in commercial activity. The overall impact on the sector is viewed optimistically by John McCartney, BNP Paribas’s research head.
Optimistic Future Expectations for the Construction Industry
The Future Expectations Index shows that 81% of firms in the industry remain optimistic about the future. This optimism is fueled by falling steel and insulation prices, along with lower construction wage costs. Although input costs are rising, the rate is slower due to reduced pressure from material prices and wage costs.
Housing Commencements Exceed Last Year’s Figures
Housing commencements are on track to surpass last year’s numbers, with the government aiming to complete 29,000 homes this year. In contrast, the Irish services sector experiences its slowest growth in 2021 due to high cost pressures.
Increased First-Time Buyer Mortgage Approvals
First-time buyer mortgage approvals have significantly increased compared to the previous year. Additionally, new homes price inflation stands at 11%, which is seen as positive for viability amidst the global economic slowdown.
This article provides an overview of the recovery in the Irish construction industry, highlighting positive indicators such as the rise in PMI, improved housing and commercial activity, and optimistic future expectations. Despite a market slowdown, the industry shows resilience, with housing commencements exceeding last year’s figures and increased mortgage approvals for first-time buyers. This positive trend contributes to the overall economic outlook for Ireland.
