The Irish construction industry concluded the first quarter of 2025 on a positive trajectory, as indicated by the latest AIB Ireland Construction Purchasing Managers' Index (PMI). The seasonally adjusted index rose to 53.9 in March, up from 50.6 in February, marking the strongest growth in construction activity since July 2024.
New Orders and Sectoral Performance
A notable driver of this growth was a sharper increase in new business, reflecting improved client demand and a healthier market environment. The housing sub-sector experienced a significant uplift, with activity reaching its highest level in eight months. Commercial construction also saw modest gains, while civil engineering continued to face challenges, registering a decline for the ninth consecutive month.
Employment and Supply Chain Dynamics
In response to the uptick in new projects, construction firms expanded their workforce, leading to the fastest rate of job creation in nine months. Additionally, purchasing activity among companies increased, driven by the need to support ongoing and upcoming projects. Despite this rise in demand, suppliers managed to deliver inputs more promptly, resulting in the first improvement in vendor performance since December 2023.
Inflationary Pressures and Business Outlook
Input costs continued to rise, attributed to higher prices for materials such as insulation and cement. However, the rate of input cost inflation was the slowest recorded since November 2020. Looking ahead, construction firms expressed optimism, with 46% of respondents anticipating increased activity over the next twelve months, buoyed by strong pipelines of new work and expectations of further improvements in market conditions.
Commenting on the findings, Oliver Mangan, AIB Chief Economist, stated:
"The March PMI data are encouraging, showing a strengthening in activity and new orders in the construction sector. The rebound in housing activity is particularly welcome, given the strong demand for new homes. The improvement in supplier delivery times and easing of input cost inflation also suggest that supply chain pressures are abating."
Read the latest AIB Ireland Construction PMI® here.
IRELAND'S CONSTRUCTION & ENGINEERING SECTORS' UPCOMINGJOBS & RECRUITMENT EVENT RETURNS TO THE RDS IN 2025
DATE
Saturday, 7th June, 2025
LOCATION
Serpentine Hall, RDS, Dublin
EXHIBITORS 20+ Companies
SEMINARS Full Day Of Industry Talks
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