The headline seasonally-adjusted BNP Paribas Real Estate Ireland construction total activity index rose to 53.2 in April, up from 51.6 in March.
The index is compiled by S&P Global from responses to a questionnaire sent to about 150 construction firms. A finding above 50 means a monthly increase in activity, while anything below 50 is a decrease.
The March-April index figures represent the first back-to-back monthly expansion for almost two years. Other leading indicators were also positive, suggesting a sustained increase in building activity, which will be good news for Taoiseach Simon Harris and his Government as they strive to achieve ambitious house-building targets.
As was the case in March, construction firms surveyed said they were seeing increases in activity on both housing and commercial projects. Commercial posted the strongest expansion figures, however, while the rise in residential activity was described as “solid”.
Commenting on the results John McCartney, head of research at BNP Paribas Real Estate Ireland, said: “The March rebound continued in April with the PMI showing further expansion, and at a faster rate. Increased activity was reported across the board.
“On the residential side, the number of dwellings under construction dipped last year as completions had been outstripping new starts. However, this situation has reversed dramatically with twice as many commencements (11,956) as completions (5,841) in the first quarter of 2024.”
Mr McCartney said there was uncertainty about whether the surge in commencements was a one-off caused by builders rushing to avail of an April 24 deadline for a waiver of development contributions. The deadline has since been extended.
“Leading indicators on the PMI dashboard suggest that the momentum may be sustained,” he said. “New orders, employment and input purchases all rose further, while 87pc of building firms said they expected to be as busy or busier this time next year.”
Mr McCartney said the strong expansion in commercial building was because a long pipeline of office blocks was getting to the finishing-out stage. “With oversupply in the market, the flow of speculative office-starts tailed off some time ago. Therefore refurbishments and retrofits, rather than new-builds, will account for an increasing share of commercial activity over the medium term.”
The pace of input-cost inflation was stable in April, but prices are continuing to rise. Some companies said they had noticed higher oil and transportation costs in particular.
