The outlook is mixed. Ireland’s construction market is supported by strong public investment and a long-term infrastructure pipeline, but near-term growth is shaped by uncertainty. Energy price volatility, trade disruption, and policy changes are affecting confidence and costs. While sectors such as housing and logistics show positive signals, it may take time for major programmes to translate into consistent workload across the supply chain.

Yes, but growth is expected to be gradual and uneven. Our report indicates that the construction sector is moving toward recovery after a slowdown in late 2025, supported by a growing workforce and strong public investment through the National Development Plan. However, near-term growth may be constrained by global uncertainty, including energy market volatility and trade disruption. While the long-term outlook remains positive, it may take time for major investment programmes to translate into consistent workload across the industry.

The construction pipeline points to strong future demand, but with a lag in delivery. This edition of the Ireland Market View highlights a substantial pipeline driven by public investment, including major infrastructure and housing programmes under the National Development Plan. However, many of these projects are still in early procurement or planning stages, meaning it may take time for this activity to reach contractors. As a result, short-term workload may remain uneven, even as long-term demand for construction continues to build.

Construction inflation in Ireland is expected to remain moderate in the short term but increase over time. This edition of our report forecasts inflation of 3–4% in 2025 and 3–5% in 2026, rising to 4–6% from 2027 as workload from major investment programmes accelerates. In the near term, weaker activity has reduced pressure on prices, but risks remain. Energy volatility linked to global conflict, along with steel tariffs and carbon-related costs, are expected to drive future increases in construction costs.

CBAM and new steel tariffs are expected to increase construction costs, particularly for carbon-intensive and steel-heavy projects. In this edition of the whitepaper, we note that CBAM has already driven price increases—around 7% for rebar and 3–4% for flat steel products, with cement up by 10–15%. While the overall impact on total project cost is relatively modest (less than 0.5%), the effect is more pronounced in specific elements such as framed structures. Additional EU steel tariffs from mid-2026 are likely to set a higher price floor for steel, increasing upward cost pressure.

The Iran conflict could increase uncertainty across growth, inflation, and investor confidence. Disruption to global energy supply—particularly through the Strait of Hormuz—has led to volatile energy prices, which directly affects construction costs, especially for energy-intensive materials such as cement, glass, and steel.

For Ireland, which relies heavily on imported energy, this may result in higher inflation and borrowing costs, alongside reduced confidence in investment. The combined effect could slow demand while increasing costs, creating a more challenging environment for construction delivery in the short term.

The outlook for housing construction in Ireland is stable but still below required levels. The Ireland Market View Spring 2026 indicates that housing activity has returned to more typical levels, with new starts suggesting annual output of around 36,000 homes. However, this remains well short of the volume needed to meet national targets, meaning build rates will need to accelerate significantly in the coming years.

While there are signs of recovery and improving confidence, housing delivery continues to face challenges linked to cost, capacity, and project timelines, which may limit how quickly supply can increase.

Growth in Ireland’s construction sector is expected to be selective and uneven. Residential construction is showing positive momentum, supported by increased housing starts and improving confidence. In the commercial sector, logistics and prime office development are also strengthening, driven by low vacancy rates and renewed demand.

In contrast, large-scale infrastructure programmes are expected to drive future growth, but many are still in early stages and have yet to fully reach the supply chain. As a result, while several sectors show signs of expansion, overall growth will take time to become more widespread across the industry.

The National Development Plan (NDP) is Ireland’s long-term public investment programme focused on housing, infrastructure, and economic development. The NDP will play a central role in driving future construction activity, with increased capital spending already planned from 2026 onwards.

Its impact on construction will be significant but gradual. While major programmes such as transport, water, and education projects are moving through procurement, it may take time for this investment to reach contractors and translate into consistent workload. Over the longer term, the NDP is expected to support sustained demand across the construction sector.

Data centre development is expected to increase construction demand, particularly in energy and infrastructure-related projects. Lifting the moratorium on data centre connections could unlock a new cycle of investment, driving demand for both on-site power infrastructure and renewable energy capacity.

However, the impact is complex. New requirements—such as providing on-site power generation and transitioning to renewable energy—significantly increase capital cost and project complexity. While this may limit the number of schemes in the short term, it is likely to strengthen Ireland’s long-term position as a leading destination for data center investment, supporting sustained construction activity.