Construction PMI at 48.4 as new orders return to growth in December
Employment expands for second month and business confidence reaches 11-month high despite ongoing contraction
Tuesday 13 January 2026 | đŸ“§Â editor@breakingground.news
Ireland’s construction sector remained in contraction at the end of 2025, but the pace of decline eased and forward-looking indicators strengthened, according to the latest AIB Ireland Construction PMI from S&P Global.
The headline Total Activity Index rose to 48.4 in December, up from 46.7 in November. While still below the 50 threshold that signals growth, this marked the slowest rate of decline since June 2025 and the eighth consecutive month of falling overall activity 0741a85c797a415db7bd83ea902b6087.
Activity declined across residential, commercial and civil engineering, although the rate of contraction eased in all three segments. Residential construction was the strongest performer, with the softest decline in seven months. Commercial activity fell for a second month, while civil engineering remained the weakest sector.
A key shift in December was the return of new orders to growth for the first time in five months, pointing to improving client demand towards the end of the year. New orders are viewed as a leading indicator for future workload and capacity planning across the industry.
Improved demand fed through to employment and purchasing decisions. Construction firms increased staffing levels and purchasing activity for the second consecutive month, while the use of subcontractors rose for the first time in six months. However, greater subcontractor demand further reduced availability across the market.
Business confidence strengthened to an 11-month high, with firms reporting increased enquiries and a more positive outlook for activity over the next 12 months. This improving sentiment suggests cautious optimism for 2026 despite ongoing challenges.
Supply-side pressures persisted. Suppliers’ delivery times lengthened again in December, reflecting material shortages and logistical delays. Input costs continued to rise sharply, driven by higher prices for metals including steel, copper and aluminium, although the rate of inflation eased slightly from November’s eight-month high. Subcontractor rates also increased, albeit at the slowest pace in six months.
The December PMI data were collected between 4 and 22 December 2025 and reflect responses from around 150 construction firms across Ireland. While current output remains under pressure, the combination of rising new orders, improving confidence and expanding employment points to a sector that may be approaching a turning point as it enters 2026
