Construction activity in Ireland contracts for fifth consecutive month

Ireland’s construction sector saw its fifth consecutive monthly decline in September, according to AIB’s latest purchasing managers survey. The headline index fell to 43.7 from 45.9 in August, the lowest since December 2022, reflecting falling activity across residential, commercial, and civil engineering projects.

Residential construction continued to contract, though slightly less sharply than in August. Commercial activity fell for a second month, while civil engineering recorded its steepest decline since October 2022. New orders, a key leading indicator, also weakened, signaling a challenging environment ahead. Employment in construction fell for the first time in seven months, highlighting pressures on the labour market.

Despite the downturn, firms remain cautiously optimistic about a potential recovery over the next 12 months, suggesting improvement as market conditions evolve.

In contrast, housing association Respond announced plans to complete nearly 1,000 social and cost rental units in 2025, their highest annual output to date. Completed projects this year include 334 homes at Seven Mills, Dublin, 18 in Blackpool, Cork, and 97 in Drogheda, Co Louth. Respond currently has 3,458 homes under construction, underscoring its role in meeting urgent housing demand.

Minister for Housing James Browne highlighted that while the sector faces mixed signals, policy measures, such as the Budget VAT cut for apartments, are expected to take effect in early 2026. He also noted that 40,000 apartments currently hold planning permission, though securing financing typically takes three to four months.

Explore the full article of Ireland’s construction sector trends and insights into future development in the complete article.