Construction PMI falls to 47.1 as Irish sector returns to contraction in April
New orders decline for the first time in five months while input costs rise at the fastest pace since June 2022
Ireland’s construction sector returned to contraction in April as geopolitical instability, rising fuel costs and project uncertainty weighed on activity across the industry, according to the latest AIB Ireland Construction PMI.
The headline AIB Ireland Construction Total Activity Index fell to 47.1 in April, down sharply from 53.2 in March. Any reading below 50 indicates contraction. The decline marked the first reduction in total construction activity in three months and the fastest fall since November 2025.
Survey respondents linked the slowdown directly to uncertainty arising from the conflict in the Middle East, with firms reporting that projects were being delayed or placed on hold. Rising prices also contributed to weaker demand and slower activity levels.
The data showed that new business volumes fell for the first time in five months, with the rate of decline the sharpest since August 2023. The report identified reduced client confidence and delays in committing to projects as key factors behind the fall in new orders.
Commercial construction remained the only sector to record growth during April, although the pace of expansion slowed significantly. Housing activity moved back into contraction after two months of growth, while civil engineering activity declined for the twelfth month in a row. Residential activity registered an index reading of 46.7, while civil engineering fell to 44.4. Commercial activity stood marginally above growth territory at 50.3.
The report also highlighted a sharp escalation in construction inflation pressures. Input costs rose at the fastest pace since June 2022, with almost 68% of firms reporting higher costs during the month. Fuel prices were identified as a major driver of inflation.
Supply chains also came under pressure during April. Fuel protests and shipping disruption linked to the Middle East conflict resulted in the sharpest deterioration in supplier delivery times since May 2022. Some firms responded by bringing forward purchases of materials amid concerns about further disruption and price increases.
Despite weaker activity levels, employment in the sector continued to grow. Construction firms increased staffing numbers at the fastest pace in just over two years as companies responded to previous periods of stronger order growth. Usage of subcontractors also increased modestly, while subcontractor availability declined sharply.
Commenting on the figures, AIB Senior Economist John Fahey said the survey reflected a “subdued operating environment” for the sector during April. He noted that the decline in new orders was a particularly significant indicator because it pointed to weakening activity ahead.
Business confidence also weakened significantly during the month. Sentiment regarding future activity dropped to its lowest level in almost three-and-a-half years as firms became increasingly concerned about inflation and geopolitical instability. Some companies, however, remained optimistic that new orders could recover over the coming year.
