Irish house building activity increased in February and remained the best performing category within the construction sector here last month despite “mixed” signals from the sector overall, AIB said on Tuesday.
In its latest construction purchasing managers’ index (PMI) report, the bank said there were some positive signs for activity last month, with firms reporting an increase in new orders and housing and commercial project commencements.
The report is based on a survey of around 150 construction companies.
Still, overall construction activity continued to “moderate” in February, AIB said. The headline index remained below the neutral 50 threshold – which separates growth in activity from contraction – at 48.7 from 48.2, indicating a further decline in activity levels.
February was the fifth month in the last six that the index has been below 50.
John Fahey, senior economist at AIB, said the headline index represented a “slight improvement” from January but indicated the sector remained in “contractionary territory … highlighting the muted operating environment for building activity”.
However, he said there were some “encouraging signs” from the sector with new orders – “regarded as a key leading indicator – moving back into growth territory in the month.
“Survey respondents noted improved demand and greater capacity as factors in the return to expansion in new orders,” Mr Fahey said. “However, employment fell in the construction sector last month, ending a five-month period of jobs growth.”
In general, construction companies remain optimistic about the outlook for activity levels in the coming year despite uncertainty around the impact that US tariffs could have on the sector.
