House building fell last month even as activity in construction accelerated marginally in the Republic, new figures show.
The Government wants 300,000 homes built in the State by 2030, while it has pledged billions of euro to infrastructure projects meant to pave the way for residential construction.
But a report on Tuesday shows that house building activity fell in the Republic in September, even while other parts of the construction industry expanded.
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AIB’s construction purchasing managers’ index (PMI) registered 50.4 last month, indicating slight growth in activity on August.
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Any reading below the benchmark 50 signals a slowdown on the previous month, while a result above that figure indicates growth.
Building activity has increased for three months running, AIB said in a statement, having slowed sharply earlier in the year as high energy prices hit the industry.
Companies surveyed last month cited rising demand as the factor behind the increased activity. However, the house building index slid to 47.2 in September, showing that the rate of residential construction fell during last month.
September’s fall in residential construction followed a drop in August, the index states.
Growth continued in the other categories that make up the index, the figures show.
Commercial construction, which monitors the building of factories, shopping centres and other business premises, increased to 52.4. September was the third consecutive month in which commercial building grew, the PMI shows.
Civil engineering, which includes State-sponsored infrastructure building, returned to growth, with that section of the index hitting 52.3.
Builders continued grappling with rising fuel costs, a consequence of the US-Iran war, last month, according to AIB senior economist John Fahey. High prices “remained a key challenge” for the industry in September, he said.
Increased fuel bills have hindered construction growth since the war’s outbreak in February.
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“At the same time, the construction sector saw a fall in staffing levels, with employment numbers dipping in September following a sustained period of growth over the past year,” Fahey added.
September’s fall in employment ended 10 consecutive months where builders hired more staff, the index indicates.
But other data suggest encouraging signs. New orders, which indicate future work, rose for the third month in a row, said the economist.
“Meanwhile, construction firms’ level of confidence in the prospect of higher activity levels over the coming 12 months remained resilient,” said Fahey. “Positive sentiment was underpinned by rising new orders and a healthy pipeline of new projects.”
