Activity in Ireland’s construction sector declined at its fastest pace since June 2013 in September, according to the latest AIB Ireland Construction Purchasing Managers’ Index (PMI).
The headline PMI fell sharply to 41.2, down from 44.3 in August and remaining well below the 50.0 mark that separates growth from contraction. The report points to a "marked and accelerated" downturn, driven by a combination of rising input costs and a sustained weakening of new orders.
The decline was broad-based across all three major sub-sectors:
Housing Activity: Recorded its steepest fall in over a year.
Commercial Construction: Saw a rapid and accelerated decline.
Civil Engineering: Remained the weakest-performing segment, contracting for the sixteenth consecutive month.
A key concern highlighted in the survey is a rapid deterioration in the jobs market. Employment in the construction sector fell at the sharpest rate since May 2020, a period dominated by the first COVID-19 lockdowns. Companies cited reduced workloads and efforts to control costs as the primary reasons for cutting staff.
Despite a slight easing in the rate of input price inflation, cost pressures remain significant. Firms reported higher prices for materials, energy, and insurance, squeezing profit margins at a time of falling revenue.
The combination of these challenges has led to a deeply pessimistic outlook. Business sentiment for the year ahead remained negative, with over a quarter of survey respondents expecting a further decline in activity.
Source: AIB Ireland Construction PMI, September 2025 Report. https://aib.ie/content/dam/aib/fxcentre/docs/resource-centre/aib-ireland-construction-pmi/sep-2025-report.pdf
