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Irish Examiner
08-07-2025
- Business
- Irish Examiner
Construction sector records fastest activity decline in almost 18 months
The Irish construction sector recorded a contraction in activity for the second month in a row during June as both housing and civil engineering work saw declines, the latest AIB Ireland Construction Purchasing Managers' Index (PMI) shows. According to the PMI, business conditions in the construction sector remained subdued in June with total activity decreasing slightly again, despite growth in commercial activity. Meanwhile, new orders, employment and input buying continued to rise but at modest rates. The PMI reading for June stood at 48.6 - down from 49.2 in May. A reading of 50 would indicate no change in the sector while a reading below it represents a decline in activity. 'The rate of decline was modest, but the fastest in almost a year-and-a-half… In line with the picture for total construction activity, work on housing projects decreased for the second successive month in June,' the PMI said. John Fahey, senior economist with AIB said the PMI indicated a 'muted performance' for the sector heading into the second half of the year. The latest AIB Ireland Construction Purchasing Managers' Index (PMI) shows work on housing projects decreased for the second successive month in June. File photo: Yui Mok/PA He said the June reading implies a 'quicker pace of contraction in construction activity at the end of the second quarter'. 'Residential construction activity contracted for a second successive month. The pace of reduction was modest, but it did contract at a faster rate compared to May,' Mr Fahey said. 'Meanwhile, civil engineering was, once again, the weakest of the three sub-sectors, with activity contracting for the second month in a row also.' Housing completions The declines in the housing construction sector comes as both the Economic and Social Research Institute (ESRI) and Central Bank of Ireland revised downwards their expected home completions for this year. The ESRI has previously suggested that up to 53,000 new homes a year could be needed by 2030 given the increasing population demands. There were just under 6,000 new homes completed during the first quarter of the year - a slight increase of 2% compared to the same period in 2024. Further measurements Commercial construction activity was the only source of growth in the sector last month which increased for the fifth month running, and at the same solid pace as in May. In the areas that saw a decline in activity, firms reported this was linked to economic uncertainty and muted demand conditions. On the other hand, some firms noted that new contracts had been secured. New orders increased for the fifth consecutive month while employment also rose slightly in June but at the slowest pace in the current four-month sequence of job creation. 'According to respondents, new staff were hired in order to help fulfil orders and work on future projects,' the PMI said. Input costs for the sector also increased during June but at the slowest pace in five months. In its outlook, the PMI reported that firms in the construction sector were optimistic that activity will increase over the coming year particularly in the area of housing. 'That said, concerns around geopolitical issues and economic uncertainty meant that optimism eased to a three-month low. As well as raising employment, firms also expanded their purchasing activity and increased their usage of sub-contractors,' the PMI said.
Irish Examiner
03-07-2025
- Business
- Irish Examiner
Services sector sees 'significant loss of momentum' in June
The services sector in Ireland saw a 'significant loss of momentum' during June as a result of softer output, new business and hiring activity, the latest AIB Ireland Services Purchasing Managers' Index (PMI) shows. The PMI reading for the sector in June stood at 51.5, down from 54.7 in May, which marks the slowest pace of growth since January 2024. The PMI reading is calculated from a survey of firms on the volume of business activity compared with one month previously. The index therefore varies between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. AIB chief economist David McNamara said new business expanded at a 'modest pace in June', dampened by an 'outright decline in export orders'. The PMI found international demand also contracted for the first time since October 2023. 'Some firms linked lower export activity to weaker US and European markets, and the impact of global trade tensions,' Mr McNamara said. The PMI also showed expectations 'remained close to the post-pandemic low'. Only two services sub-sectors registered growth during the month — the technology, media, and telecoms sector, and the business services sector. Transport, tourism, and leisure saw a decline for the fourth month in a row, while financial services contracted for the first time since January 2021. Firms found cost pressures eased during June to a nine-month low, while service providers raised their charges at the slowest rate in more than four years.
Irish Independent
13-05-2025
- Business
- Irish Independent
Construction sector reports another month of increased activity
Housing projects expanded for the eighth consecutive month, according to the AIB Ireland Construction Total Activity Index. Its overall headline figure was again above the no-change mark of 50 last month. The figure of 52.4 for April was slightly down from 53.9 in March, but meant a second consecutive month of growth in Irish construction activity. New business expanded for the third successive month. The fastest increase was in commercial activity, while civil engineering grew at the quickest pace since February 2022. The slowest increase in activity was on housing projects, but there has been growth in the residential category for eight months running. Employment in construction was up last month, and at a slightly stronger pace than in March, while the use of subcontractors also increased. A bigger demand for materials meant that suppliers hiked their prices in April, with the rate of input inflation remaining above average. The growth in purchasing activity also meant that delivery times took longer with vendors having to cope with a shortage of staff. Subcontractor rates also increased, at the fastest pace for a year. John Fahey, senior economist with AIB, said: 'The survey for April showed that the sector had a solid start to the second quarter. The headline index remained above the key 50 level, consistent with a second consecutive month of an expansion in activity. 'Firms attributed the growth in activity to an improvement in demand conditions. This was reflected in new orders expanding for a third straight month, broadly maintaining the pace of growth recorded in March. This backdrop of new projects saw firms continue to increase their staffing levels.' Construction firms are optimistic about increasing activity levels over the next year, although some did mention that there may be a drag due to uncertainty over US trade policy. About one in three firms surveyed were optimistic, with just over one in 10 saying they were pessimistic. The AIB Ireland Construction PMI survey is compiled by S&P Global from responses to questionnaires sent to a panel of about 150 construction firms. Survey responses are collected in the second half of each month, and indicate the direction of change compared to the previous month.
Irish Times
06-05-2025
- Business
- Irish Times
Growth in Irish services sector is subdued
The Irish services sector experienced subdued growth last month while the industry outlook is the weakest in more than four years, the latest AIB purchasing managers index (PMI) has revealed. In the aftermath of US tariffs policy announcements and volatility in the financial markets, the 12-month outlook was the weakest since October 2020 in the face of the uncertainty. 'Firms in the Irish services sector remained optimistic on the prospects for expansion in activity levels over the coming 12 months,' AIB chief economist David McNamara said, with 38 per cent of participating companies projecting growth against 18 per cent forecasting contraction. 'However, the strength of sentiment continued to soften, falling to its lowest level since October 2020. READ MORE 'Firms cited the potential impact of US tariffs, financial market turbulence and uncertainty in relation to international trade.' The seasonally adjusted AIB Ireland services business activity index fell to 52.8 in April, from 55.3 in March, showing that services activity still expanded during the month but at a much slower pace. The index ranges from 0 to 100, with a figure above 50 showing growth. While growth was slow, job creation in the service sector continued at a 'steady pace', which was above the long-term average. The growth of new business and total activity increased at the slowest rates in 18 and 15 months respectively. The new businesses index underwent its largest monthly fall since January 2021. Wages remained the principal driver of cost inflation in April, the AIB survey found, noting that average input prices increased at the weakest rate in five months and at a rate that was 'broadly equal' to the overall trends in the industry. Other sources of cost inflation mentioned in the survey were insurance, fuel, food and general supplies. Cost pressures eased in multiple sectors including in transport, tourism and leisure. The financial services sector experienced a steeper increase in cost inflation than last month and the largest overall increase. Despite the reduction in input costs for the transport, tourism and leisure industry, the PMI found that the sector had a decrease in outstanding business for the fourth time in five months, and employment growth was weak. The sector saw a decline for the second month in a row.
Irish Independent
06-05-2025
- Business
- Irish Independent
Pace of growth slows in services sector but hiring remains strong
But new figures published this morning by AIB show that the sector still remained in expansion mode and grew at a faster pace than in the eurozone, the UK and the United States last month. The overall AIB Ireland Services Purchasing Managers' Index for April stood at 52.8, compared to 55.3 in March. Any figure over 50 indicates expansion, and any below, contraction. Reported new business grew at its slowest rate in 18 months and the 12-month outlook was the weakest last month since October 2020. That uncertainty came amid the fallout from Donald Trump's push to impose tariffs and the boarder financial market volatility that ensued. 'That said, companies continued to expand their workforces at a robust rate and outstanding business increased further, while inflationary pressures softened,' notes the AIB report. All but one of the segments within the services sector grew, with transport, tourism and leisure posting a reading of 48.1. That was the second monthly decline in activity for that segment, and it contracted at a faster pace than previously. Last week, figures from the Central Statistics Office (CSO) that showed a further drop in tourism during March were disputed by the Irish Tourism Industry Confederation and the Irish Hotels Federation. According to the CSO, the number of foreign visitors to Ireland during March tumbled 15pc to 441,000. The visitors spent €326m on their trips, not including fares. That was 22pc lower than what was spent in March last year. But bodies representing the tourism and leisure sector said this has not been the experience of their members. The latest AIB PMI survey shows employment growth at Irish service providers remained solid last month, for both full and part-time positions. The increases were seen across the transport, tourism and leisure sectors, as well as in business services, technology, media and telecoms. ADVERTISEMENT Financial services saw the fastest jobs growth since 2024, putting in another strong monthly performance. David McNamara, AIB chief economist, said that Irish services firms remain optimistic and that inflation has eased. 'On the inflation front, the input cost index declined for the first time this year, with wages remaining the main driver of higher costs,' he said. 'Similarly, the price charged index also fell in April, although it remained well above its long-run average,' he added. 'Meanwhile, firms in the Irish services sector remained optimistic on the prospects for expansion in activity levels over the coming 12 months. 'However, the strength of sentiment continued to soften, falling to its lowest level since October 2020. Firms cited the potential impact of US tariffs, financial market turbulence and uncertainty in relation to international trade.' Average input prices increased at the weakest rate in five months, and at one that was broadly equal to the long-run survey trend. Charges also increased at the softest pace in five months, but still remained above the long-run trend.
