There were further sign of demand weakness in the Irish construction activity sector in November as new orders continued to fall and construction activity reduced, a monthly survey of purchasing managers noted today.
The Construction Purchasing Managers Index (PMI) survey also showed inflation pressures continuing with the highest input costs since March recorded. The AIB Construction PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 150 construction companies.
Commenting on the survey results, John Fahey, AIB Senior Economist, said that the survey for November points to a loss of momentum in building activity levels midway through the fourth quarter.
The Total Activity Index declined to 46.7 after being at 48.1 in October, and the AIB report noted that construction activity had now decreased in each of the past seven months, with the
penultimate month of the year seeing a solid reduction.
The Activity index has now been below the key breakeven level of 50 for seven consecutive months, Mr Fahey noted.
Anecdotal evidence pointed to slowing demand and a drop in new orders which meant that volumes of new projects were insufficient to fully replace completed contracts, the PMI report noted.
Activity decreased across all three monitored categories – housing, commercial, housing and civil engineering – in November with commercial construction recording a “renewed and solid decline in activity”.
The survey also showed that work on housing projects fell for the seventh consecutive month, but at the slowest pace since June, and one that was the weakest of the categories covered by the report. Civil engineering posted the sharpest decline as the rate of contraction accelerated from October.
New orders decreased for the fourth consecutive month as companies reported weak demand and project delays. The latest fall was slight, but sharper than seen in October, the survey found.
However, the report also noted that although construction activity and new orders decreased in November, firms were optimistic for growth over the coming year.
A number of respondents indicated that they expect to be busier in 2026, although sentiment eased to a four-month low.
But positive sentiment for the coming year encouraged constructors to expand their employment and purchasing activity in November. Staffing levels increased for the first time in three months, while the slight rise in input buying ended a four-month sequenceof contraction. Firms continued to lower their usage of sub-contractors, however, and their availability also declined again.
Where companies purchased items, they were faced with a further lengthening of suppliers’ delivery times, continuing the trend seen
John Fahey said that “the sectoral breakdown showed that the weakness in activity levels in November was broad-based across the three sub-sectors.”
“Commercial construction fell back into contractionary territory in November, having seen a modest pace of expansion in October. The downturn in residential building persisted, with activity levels declining for the seventh successive month.”
“However, the pace of contraction eased in November. Civil engineering also posted a seventh straight month of contraction, with the pace of decline worsening, resulting in it being the weakest performing sub-sector” he added .
“Some of the other main underlying sub-indices from the November survey provided some mixed news. New orders, which is viewed as a leading indicator, contracted for the fourth month in-a-row, with the pace of decline also accelerating,” the AIB economist noted.
“However, there was some encouraging news in terms of staffing levels. Despite falling building activity, the sector saw an expansion in employment, following declines in the previous two months. Construction firms also retained a positive outlook on the prospect of increased activity levels over the coming 12 months, albeit the degree of optimism did ease marginally compared to October, he added.