A new report published by Turner & Townsend reveals that Ireland’s construction market remains resilient, with strong activity levels supported by housing delivery and public sector investment, but faces growing pressure from rising costs, intensifying competition, and geopolitical uncertainty
Housing continues to underpin the Irish construction market, accounting for approximately 62% of activity, with public housing outperforming private delivery.
Contractors remain highly utilised, and near-term pipelines are supporting stable output through 2026, highlighting the sector’s ability to sustain delivery despite a more complex operating environment.
A growing imbalance between supply and demand
However, Irish construction market conditions have become more competitive, with 76.9% of contractors describing tendering as ‘lukewarm’ and 30.8% identifying a ‘cooling’ market.
This reflects a growing imbalance between supply and demand, as more contractors compete for a limited pool of projects, placing sustained pressure on pricing and margins.
Cost pressures are re-emerging in the Irish construction market
At the same time, cost pressures are re-emerging, driven in part by global supply chain disruption linked to ongoing geopolitical tensions in the Middle East.
These factors include rising energy and transport costs, reduced supplier willingness to fix prices, and material price increases of 8%–25% across the sector.
Key materials including reinforcement bar (14.7%), structural steel (13.0%), and concrete (10.9%) are forecast to rise sharply.
Labour cost growth of approximately 3–4% continues to add further pressure, widening the gap between tender pricing and underlying input costs, and increasing the risk of margin erosion.
Collaborative risk management in a volatile environment
Looking ahead, while order book coverage remains strong at around 78% for 2026, it is expected to decline to approximately 55% in 2027, signalling weaker pipeline visibility and the potential for increased competition in the medium term.
In response, clients and contractors are increasingly adopting more collaborative, risk-managed approaches to procurement and delivery to improve cost certainty in a more volatile environment.
Bryn Griffiths, head of cost management for Ireland at Turner & Townsend, said: “The Irish construction market is showing strong resilience, particularly with the continued focus on housing delivery and public sector investment.
“However, global uncertainty – particularly the ongoing geopolitical situation in the Middle East – is beginning to feed through into the market, driving cost volatility and supply chain disruption.”
He concluded: “Combined with increasing competition and a weakening forward pipeline, this is creating a more challenging environment, where early engagement, collaboration and proactive risk management will be critical to sustaining delivery.”
The post Irish construction market facing rising cost pressures and intensifying competition, report finds appeared first on Planning, Building & Construction Today.
