Construction activity fell in November, new data from BNP Paribas Real Estate Ireland has found.
The fall in its Construction Total Activity Index is the fifth successive monthly drop.
The organisation says respondents blamed a slowdown in the economy, the completion of projects and delays in decision making at clients.
Activity slipped in all three categories it measures, with housing recording the largest fall since April.
“November saw sharp contractions in both commercial and residential activity,” said John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland.
“On the commercial side, 2023 will be a record year for Dublin warehouse completions, with significant development also occurring in Cork.”
“However rising interest rates and construction costs have made developers more cautious, therefore the 2024 pipeline is weaker and early-stage activity is being impacted.”
The survey found in Dublin’s office market, developers have heeded the signals of rising vacancy and softening lease terms to turn off the supply tap.
“Completions will fall by 25-30% this year, and the 2024 pipeline is lower again,” Mr McCartney said.
“Indeed, with speculative commencements off the table for next year, this slowdown in office building may persist until 2027.”
Mr McCartney said the continued weakness in the residential sector was surprising given the latest national accounts shows investment in new dwellings are up 8.4% compared with the first nine months of last year.
“Completions are up by 8.8% in the same period and, with commencements rising even faster, the longer-term trend is also positive,” he said.
“The most likely explanation is that activity has temporarily slowed in October and November due to projects being completed as we approach year-end.”
“However, national accounts data also reveal that the home improvement market has contracted over the last six months as build costs continue to rise.”
Business confidence did strengthen in November though, with a third of respondents predicting a rise in activity over the coming year.