The Irish construction industry is showing signs of recovery, as indicated by an increase in BNP Paribas (OTC:) Real Estate Ireland’s PMI to 48.6 in September from 44.9 in August, according to data compiled by S&P Global on Monday. This comes despite a slight market slowdown, following a survey involving 150 firms.
BNP Paribas’s Construction Activity Index for September revealed a lessened contraction in construction activity. The primary cause of this contraction was a market slowdown, but there were signs of improving demand with new orders moving towards stabilization after significant reductions during the summer months.
John McCartney, BNP Paribas’s research head, has attributed the rise in the PMI to a marginal slowdown compared to previous months. Despite the contraction, housing activity is improving and commercial activity has seen significant recovery. McCartney highlighted the month’s overall positive impact on the sector.
The Future Expectations Index shows that 81% of firms remain optimistic about the future, buoyed by falling steel and insulation prices and lower construction wage costs. Input costs are rising but at a slower rate due to reduced pressure from material prices and wage costs.
Housing commencements are on track to exceed last year’s figures, with the Government targeting a completion of 29,000 homes this year. In contrast, the Irish services sector saw its slowest growth this year due to high cost pressures.
First-time buyer mortgage approvals have increased significantly on last year’s figures. New homes price inflation stands at 11%, viewed as positive for viability amidst the global economic slowdown.
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