Ireland forecast to maintain strong construction growth, driven by housing delivery and infrastructure investment: EY- EUROCONSTRUCT

• Irish Housing Completions are forecast to rise to 40,000 in 2026, 43,000 in 2027 and 47,000 in 2028 
• Construction output is estimated to have grown by 11.7% in 2025, with expected further growth of 5.3% in 2026, 5.8% in 2027 and 6.2% in 2028
• Civil engineering activity is expected to strengthen over the medium term, supported by investment in transport, energy and water infrastructure 
• At the European level, the strongest growth in construction between 2025 and 2028 is forecast for Ireland, Poland, the UK and Portugal.

Ireland’s construction sector is forecast to maintain strong growth over the coming years, supported by a continued recovery in housing delivery and sustained public capital investment, according to the latest forecasts from EY Ireland for EUROCONSTRUCT, an independent construction market forecasting network active in 19 European countries.

Across the EUROCONSTRUCT region, construction output is forecast to grow by 2.0% in 2026, as the European market continues a modest recovery. In contrast, Ireland’s construction sector is expected to expand over the medium term, with growth of 5.3% in 2026, 5.8% in 2027 and 6.2% in 2028, highlighting its position as one of the strongest-performing markets in Europe, alongside peers such as Poland, the UK and Portugal.

This moderate European outlook reflects a combination of geopolitical uncertainty, higher energy costs and weaker consumer and business confidence, which continue to weigh on construction demand across the region.

The forecasts were presented at the 101st EUROCONSTRUCT conference in Helsinki, Finland.

Housing delivery continues to strengthen following strong 2025 outturn

Housing completions in Ireland increased significantly in 2025, reaching 36,284 units, representing a 20.4% increase on 2024 and the highest annual output recorded since 2011. This represents a stronger-than-expected recovery in housing delivery, reflecting improved activity across the sector.

As the Irish member of EUROCONSTRUCT, EY Ireland forecasts that housing completions will continue to increase over the medium term, reaching 40,000 units in 2026, 43,000 in 2027 and 47,000 in 2028.

Ireland’s housing delivery continues to stand out relative to broader European trends, where residential construction activity remains more subdued.

This stronger outlook reflects a number of factors, including the scale of public capital investment allocated to housing, the establishment and expected progress to be made by the Housing Activation Office over 2025 and early 2026, and the significant number of commencement notices recorded in 2024, when more than 69,000 units were commenced.

However, while completions are moving in the right direction, delivery remains dependent on continuing to convert planning permissions and commencements into sustained construction activity completed homes, with ongoing challenges around infrastructure provision and viability continuing to impact progress.

Infrastructure investment critical to sustaining growth momentum

Public infrastructure activity is expected to play a central role in supporting housing delivery and broader economic growth.

Output in this segment is forecast to grow by 1.2% in 2026 before accelerating to 6.4% in 2027 and 5.7% in 2028, reflecting continued investment in transport, energy and water infrastructure.

This aligns with broader European trends, where infrastructure investment remains a key driver of construction growth, supported by energy transition, transport upgrades and sustainability needs.

Mixed outlook for non-residential construction

The outlook for non-residential construction remains mixed.

New non-residential output is estimated to have increased by 6.8% in 2025, but growth is expected to slow to 0.7% in 2026, 3.8% in 2027 and 3.7% in 2028, reflecting continued softness in office development, partially offset by more stable activity across other non-residential segment.

Other segments, including education, health, industry and storage, are expected to record more moderate growth over the medium term.

Simon MacAllister, EY Partner and Co-Head of Geopolitical Strategy in Ireland and the Irish member of the EUROCONSTRUCT network, said:

“The latest EUROCONSTRUCT forecasts point to continued strong growth in Irish construction activity, building on a very strong 2025 outturn. This is a very positive trajectory, but the key challenge remains sustained delivery. The sector must continue to convert permissions and commencements into completed homes, and that will depend heavily on the timely delivery of enabling infrastructure, particularly water, energy and transport. Encouragingly there has been significant policy and legislative changes in recent times to support this, as well as record investment committed, both directly to housing and the key building blocks of enabling infrastructure, including water, sewerage and energy.

“While Ireland’s construction market is performing strongly relative to many European peers, the sustainability of this growth will depend on maintaining momentum across planning reform, infrastructure activation, apartment viability and construction capacity, as well as managing any construction inflation which may emerge as a result from the conflict in the middle east.”

European Outlook

At European level, the outlook for the construction sector remains cautiously positive, but growth is forecast to be slower than previously expected. Since the EUROCONSTRUCT forecast in November 2025, the operating environment for construction has changed in many ways. The war in the Middle East and the situation in the Strait of Hormuz have a significant impact on the global economy, energy prices, inflation and interest rate trends – all factors that weigh heavily on demand in the construction sector. Consumer and business confidence in the future has fallen, and economic forecasts have been revised downwards in several countries over the spring. It is likely that this uncertainty will continue.

Construction trends across different parts of Europe continue to diverge significantly too. In the Nordic countries and Austria, total construction output fell sharply in 2023 and 2024 and will not return to 2022 levels during the period. In these countries, the primary underlying factor is a sharp collapse in new residential construction.

The strongest growth in construction between 2025 and 2028 is forecast for Ireland, Poland, the UK and Portugal. Growth is weakest in Slovakia, Italy and Belgium. Ireland continues to stand out as the fastest-growing market, thanks to strong public investment and steady demand. Poland is also benefiting from strong medium-term growth, although forecasts have been revised slightly downward. Spain and Portugal, in turn, are benefiting from broad-based growth in both building construction and civil engineering. Germany, France, Austria and Italy continue to suffer from weak housing demand, high costs and limited financing

ENDS

More information on the projections from the 101st EUROCONSTRUCT conference, which took place in Helsinki, Finland, and construction trends across the 19 country members of the Network, including Ireland, to 2028 can be found in two reports from the Conference: “Summary Report” and “Country Report”, along with all data available in excel format. These reports are available to purchase from EY Ireland, as the Irish member of EUROCONSTRUCT.