The homebuilding sector returned to growth in February for the first time in 10 months, but the pace of expansion was marginal, new data from AIB shows.
The bank’s latest PMI data for the construction sector showed a renewed rise in activity, ending a period of reduction stretching back to May last year. The expansion in activity was recorded amid continued improvements in demand conditions.
With workloads rising, firms took on extra staff and purchased additional inputs. Meanwhile, input costs continued to increase sharply, albeit at a slightly softer pace than at the start of the year.
The headline figure moved back above the 50 no-change mark in February, posting 52.1 from 48.6 in January. The modest expansion in activity midway through the opening quarter of the year ended a nine-month sequence of contraction.
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The rise in total construction activity reflected renewed expansions in work on both housing and commercial projects in February. The sharper increase was for commercial, where activity grew solidly.
Meanwhile, civil engineering activity continued to fall, albeit to the least extent in the current 10-month sequence of decline.
Anecdotal evidence from the report indicated the rise in construction activity was in response to improving demand conditions. New orders increased for the third successive month in February, and at a marked pace that was the strongest in four years.
Higher new orders and the start of new projects encouraged constructors to expand their purchasing activity and workforce numbers.
Employment rose modestly, extending the current sequence of jobs growth to four months, with the latest increase the most marked since January 2025. The rise in input buying was the strongest in almost four years.
Sub-contractor usage was also up, the third month running in which this has been the case. Meanwhile, their availability fell to the largest extent since May last year.
Construction firms continued to face sharply rising input costs, with panellists reporting higher metals prices in particular. The rate of inflation remained elevated despite easing slightly from that seen in January.
Suppliers’ delivery times continued to lengthen, with delays linked to factors including shortages of couriers and Dublin Port congestion.
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Expectations of further increases in new orders supported ongoing confidence in the year-ahead outlook for construction activity. Companies remained strongly optimistic, albeit slightly less so than was the case at the start of the year.
The report was compiled by S&P Global from responses to questionnaires sent to a panel of about 150 construction companies. The panel is stratified by company workforce size, based on contributions to GDP.
