Quarterly construction production falls despite easing of inflation 

New figures from the Central Statistics Office show construction volumes fell by 3.3% in the quarter

Residential buildings remained down in the quarter, falling by 2.3% compared with the first three months of 2023. Pic; Larry Cummins

The volume of production in building and construction fell by 3.3% in the second quarter of 2023, new figures from the Central Statistics Office reveal.

On an annual basis, the volume of production fell by 2.1% on the back of a declining residential building sector, down by more than 10% year-on-year.

Non-residential building volumes were down by 4% in the year, with civil engineering the only sector to show an annual increase, rising by more than 22%.

Residential buildings remained down in the quarter, falling by 2.3% compared with the first three months of 2023, with civil engineering continuing on an upward growth trajectory following its post-pandemic rebound, rising by 5.8% in the same time.

Excluding civil engineering, the volume of production in building remained unchanged in the quarter.

In total, the seasonally adjusted value index for all buildings and construction increased by 1.5% on a quarterly basis and 4.3% on an annual basis.

When civil engineering is excluded, the seasonally adjusted value index decreased by 5.4% on a quarterly basis and was down 0.3% on an annual basis.

The CSO's latest figures follow data showing further drops in construction cost inflation by the Society of Chartered Surveyors Ireland (SCSI) as stabilising supply chains and falling energy prices feed through to building costs.

Last month, the SCSI reported a 6.2% annual increase in costs, which was down significantly from the 14% inflation rate recorded between July 2021 and June 2022.

"There is an ongoing need for new infrastructure and construction projects, driving up construction activity and tender prices," said chartered quantity surveyor Kevin Brady.

"However, barring any major economic shocks, we expect to see a continuation of low single-digit growth figures in the medium term."