The Government faces a challenge in hitting its home building targets for this year despite figures showing a boost to new home construction, one expert predicts.
Construction was flat overall in July overall, signalling a “stabilisation” in the industry, according to the BNP Paribas Real Estate Ireland Construction Purchasing managers’ index (PMI).
The main index slipped to 49.9 last month November from 47.5 in June, according to figures released on Monday.
Any figure above the 50 benchmark would mean that activity in the sector had expanded on the previous month, while any number below that shows that it shrank.
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However, house building continued a trend that has seen it increase over the last five months, hitting 53.2 in July from 52.4, according to the index.
This was the fastest rate of growth in residential construction since April, BNP Paribas noted.
Despite the positive housing figures, John McCartney, director and head of research at BNP Paribas Real Estate Ireland warned that 20,700 new homes needed to be built in the second half of this year to meet the Government’s 33,450 target.
“Given that the number of units under construction was down 13 per cent year-on-year as we entered 2024, this would appear to be quite challenging,” he said.
However, he added that the rate at which builders were starting work on new homes had picked up sharply in recent months and the increased activity shown by the PMI pointed to increased output.
“Although it may be 2025 before the recent surge in early-stage construction yields a material uplift in completions,” Mr McCartney predicted.
Meanwhile, commercial building steadied at 49.9 last month after slumping to 43.3 in June, Monday’s figures show.
The index also shows that new orders are growing, indicating that builders can expect business to increase in coming months.
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