Irish Construction Activity Shrinks the Most in 19 Months

The AIB Ireland Construction PMI declined to 45.9 in August 2025, down from July’s 47.1, marking a fourth consecutive contraction in the sector. It also represented the steepest decline since January 2024, driven by a renewed reduction in new orders—the first fall in seven months. All three categories of construction saw a drop in activity for the first time in a year and a half, with housing shrinking the most since November 2023. A reduction in new orders and cost pressures resulted in a second successive monthly fall in purchasing activity, albeit a modest one that was weaker than in July. Input costs rose sharply, with the rate of inflation remaining above the series average. Meanwhile, suppliers’ delivery times lengthened to the greatest extent in six months due to material shortages. Employment increased for the sixth straight month, although growth was only modest. Looking ahead, business sentiment strengthened amid hopes of an improvement in housing activity.