BNP Paribas Real Estate Ireland Construction PMI ®
Contents Overview Comment Activity by sector Demand, jobs and outlook Purchasing Subcontractors
Overview continued...
The sustained drop in output and demand led firms to decrease input buying for an eighth month in a row. The rate of reduction remained solid but was the softest since last October. Meanwhile, Irish constitution firms added to their workforces for the first time in three months, albeit only marginally. Irish construction firms faced another round of sharp input cost inflation as prices reportedly continued to rise across a broad range of products. In some more positive news, the rate of inflation softened for a second month in a row and was the least pronounced in two years. Staying on prices, sub- contractor rates increased at an accelerated and marked pace.
Supply pressures eased in January, highlighted by the softest lengthening in lead times since February 2020. January data pointed to sustained falls in sub-contractor availability, usage, and quality. That said, in all three cases rates of decrease softened from December. In fact, the rate of decline in availability was the weakest in 28 months. The outlook for activity over the coming 12 months brightened in the first month of 2023, with confidence strengthening to an 11-month high. Optimism reportedly stemmed from hopes that demand conditions would improve in the future, with new projects set to begin in the coming months.
Survey methodology Further information
Activity Index by sector sa, >50 = growth since previous month
Housing / Commercial / Civil Engineering
0 10 20 30 40 50 60 70 80
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Comment
Commenting on the latest survey results, John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland, said:
"Construction slowed slightly in January, but this month’s PMI is distinctly more upbeat than those of recent months. Although input costs are still rising, the rate of increase is at its slowest for two years. Meanwhile supply chain delays have eased somewhat, perhaps reflecting the reopening of the Chinese economy. Moreover there are positive signs for the year ahead. The relaxation of bank and local authority mortgage rules, and the raising of price caps in the Government’s shared equity scheme will give builders greater confidence in future selling prices. Meanwhile the
new Renter Tax Credit and a widening of the net for social housing support will help underpin the rental market. With confidence at an 11 month high, housing commencements have picked-up strongly in recent months, construction firms have resumed hiring, and 85% of builders now expect to be as busy or busier in one year’s time.”
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