Growth in construction sector slowed again in May
Activity in the construction sector continued to increase in May but at its slowest pace in more than a year, according to the latest Construction Purchasing Managers’ Index from BNP Paribas Real Estate Ireland.
It represents the third consecutive month of slowing growth in the sector, as rising prices and declining sentiment impacts activity.
The overall index stood at 51.5 last month, above the 50-mark that separates growth from contraction but below the 52.5 reading registered in April.
The survey suggests that much of the slowdown in growth was in the commercial construction sector, while civil engineering work continued to shrink.
Countering that, the housing sub-sector actually saw a higher rate of growth in the month, reflecting the rising number of new housing starts in recent months.
However the PMI also shows that the pipeline of new projects is waning, as new orders into the industry declined for the second month in a row.
Respondents cited rising prices as the reason for this, as some projects were postponed until cost pressures eased.
Prices also prompted a drop in sentiment within the sector, with confidence at its lowest level since October 2020.
Despite that, hiring by construction firms picked up and stood at its fastest rate since the start of the year.