Irish Construction Shrinks the Most in 9 Months

The AIB Ireland Construction PMI fell to 45.4 in June 2026 from 50.2 in May, marking the sharpest contraction in construction activity since September 2025. The downturn was broad-based, with activity declining across all three sectors, led by the residential segment, which recorded its steepest fall in nearly four years, while commercial activity contracted for the first time in five months. New orders also declined at the fastest pace since August 2023 as sharply rising prices discouraged clients from committing to new projects. In response, firms reduced purchasing activity for the first time in eight months, although employment continued to grow for an eighth consecutive month. Supplier delivery times lengthened due to shipping disruptions linked to the Middle East conflict, while input costs remained elevated amid higher oil and raw material prices, despite inflation easing slightly for a second straight month. Lastly, business confidence improved for a second consecutive month.

The AIB Ireland Construction PMI increased to 50.2 in May 2026 from April’s five-month low of 47.1, driven by a renewed increase in output and new orders. New orders grew following their first decline in five months in April, reflecting an improvement in customer demand. The rebound was driven by an increase in commercial activity, which grew at the fastest pace since March 2022. In response to the rise in new orders, firms increased staffing and purchasing activity, with employment rising at a solid pace for the seventh straight month, while input buying rose modestly. Delivery times lengthened, although the rate of deterioration was less severe than in April. On the price front, input costs increased, driven by higher fuel and oil prices amid the war in the Middle East, although inflation eased slightly compared to the previous month. Finally, sentiment improved from April's 41-month low, amid optimism that an end to the war in the Middle East would help improve business conditions.

The AIB Ireland Construction PMI dropped to 47.1 in April 2026 from March’s 10-month high of 53.2, marking the first contraction in three months. The latest figure also marked the steepest decline since last November, as new orders fell for the first time in five months and the steepest drop since August 2023 due to the impact of the Middle East conflicts. The decline was driven by a fall in housing activity for the first time in three months, while the civil engineering category continued to contract. Employment rose at the fastest rate in just over two years, while purchasing activity continued to increase. Suppliers’ delivery times lengthened to the greatest extent since May 2022 amid shipping delays linked to the conflict in the Middle East. On the price front, input cost inflation accelerated to its highest level since June 2022 due to higher fuel prices. Lastly, sentiment weakened to its lowest level in almost three and a half years amid intensifying inflationary pressures.