BNP Paribas Real Estate Ireland Construction PMI ®
Contents Overview Comment Activity by sector Demand, jobs and outlook Purchasing Subcontractors
Overview continued...
the first quarter of 2023 with the latest upturn strong overall and the most pronounced since last May. February data was also indicative of a renewed uptick in input buying, breaking the prior eight-month sequence of decline. Where firms did purchase inputs, they were again faced by delivery delays. Supply chain disruption remained the main factor causing longer lead times. However, while marked, the latest deterioration in vendor performance was the least pronounced since January 2020. Meanwhile, growth forecasts across Ireland's construction sector were positive for the sixth month in a row and the degree of optimism was
the brightest in a year amid reports of improving project pipelines and increased client engagement. Some hesitancy did, however, remain in the fact that overall sentiment remained below its long-run average. On a more negative note, cost pressures faced by Irish construction companies worsened in February. Following two months of easing, the rate of cost inflation re-accelerated from January. The same was the case for sub-contractor rates which increased at the fastest pace in three months. The quality and availability of sub-contractors, however, deteriorated but there was renewed and marked growth in usage.
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: “The ‘green shoots’ in our last PMI strengthened further in February. The pace of contraction continued to slow leaving construction effectively unchanged in the month. More importantly, the forward-looking data are pointing in a distinctly positive direction. New order books are expanding and, through their words and actions, building firms appear to be confident that this will be sustained. The proportion of
construction companies saying that they expect to be busier in 12 months’ time it at its highest level since Feb 2022 – a trend that is also evident in the manufacturing and services PMIs. Consistent with this, materials purchases have picked-up markedly and builders are taking-on additional staff at the fastest pace in a year. "Although residential activity eased slightly, the pace of contraction has softened considerably. This aligns with other positive indicators in the sector. The Dublin Housing Supply Coordination Task Force counted 18,600 new dwellings under
construction in the capital at the end of September 2022, and further 3,488 have been commenced in the capital since then – a 42% year-on-year increase. Meanwhile 2023 is set to be the biggest ever year of warehouse construction in Dublin, and potentially the biggest year for office building since 2008.”
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