Construction activity fell again in August, as new orders dropped sharply, the latest BNP Paribas Real Estate (BNPRE) Construction Purchasing Managers Index shows.
However, while the decline in activity was solid, the pace of reduction was weaker than in July.
The levels of activity fell in all three categories of construction covered, though all at a lower speed that a month earlier.
Respondents said the third successive reduction in total activity generally reflected the impact of sharp price increases.
"Activity picked-up strongly last summer as Covid restrictions were lifted and stalled projects got the green light to resume," said John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland.
"However, surging construction inflation and increased macro uncertainty have since begun to pull in the other direction. The PMI data for August flag a continuation of this more recent trend."
Of particular note in the August survey, BNPRE said, is the drop in housing activity for the third month in a row.
"Pricing signals from the sales and, particularly, the rental market indicate continued under supply," Mr McCartney said.
"We believe 28,000 new dwellings can be delivered this year. However, given the sharp re-acceleration in population growth, the positive trend in housing output needs to continue."
The PMI shows that order books fell for a fifth month in succession, with the industry expecting further contraction.
The volume of materials purchased was also sharply lower while the data suggests the rate of construction jobs growth is now flattening-out.
The inflationary pressures also hit the ability of firms to secure new orders.
Enquiries dropped off, a number of firms said, leading to a further steep contraction in new business.
The latest decline was the fifth in as many months, and broadly similar to those in June and July.
Input cost inflation levels remained high and well above the series average, despite easing for the fourth month running to the softest since March 2021.
Around a half of all respondents said that their input prices had risen over the month.
