Activity in the construction sector continued to rise in May, but at its slowest pace in more than a year, according to the latest BNP Paribas Real Estate Ireland Construction Purchasing Managers’ Index.
It represents the third consecutive month of slowing growth in the sector, as rising prices and declining sentiment weigh on activity.
The headline index stood at 51.5 last month, above the 50 mark that separates growth from contraction but below the 52.5 reading in April.
The survey suggests that much of the growth slowdown occurred in the commercial construction sector, while civil engineering work continued to shrink.
Offsetting that, the housing subsector actually saw a higher rate of growth in the month, reflecting the increased number of new housing starts in recent months.
However, the PMI also shows that the pipeline of new projects is declining, as new orders in the industry fell for the second month in a row.
Respondents cited rising prices as the reason for this, with some projects being postponed until cost pressures abated.
Prices also caused a drop in confidence within the sector, with confidence at its lowest level since October 2020.
Despite that, hiring by construction companies rebounded and remained at its fastest pace since the beginning of the year.