Ireland’s construction sector continues to demonstrate its importance to the domestic economy, with the latest Central Statistics Office (CSO) figures showing strong underlying economic performance alongside growing signs that inflationary pressures across Europe are beginning to ease.

The CSO’s Annual National Accounts show that Modified Domestic Demand (MDD) – widely regarded as the best measure of Ireland’s underlying economic activity – grew by 4.7% in 2025, reflecting continued strength in consumer spending, investment and domestic demand.

The figures also show that the Construction sector recorded 7.2% growth in Gross Value Added (GVA), underlining the industry’s significant contribution to Ireland’s economic performance.

The positive picture is also reflected in the latest Irish building magazine Top 50 Contractors League Tables, which recorded combined turnover of €20.74 billion for Ireland’s Top 50 main and specialist contractors in 2025, up from €18.4 billion the previous year. The increase highlights sustained activity across housing, infrastructure, healthcare, life sciences, advanced manufacturing and data centres, while also demonstrating the growing international reach of Irish construction companies.

Together, the figures reinforce the resilience of the construction sector, which continues to play a central role in delivering the homes, infrastructure and commercial developments needed to support Ireland’s future growth.

There are also encouraging signs that some of the cost pressures experienced by contractors over recent years may be beginning to moderate.

According to Eurostat’s latest flash estimate, annual inflation across the euro area eased to 1.9% in June, below the European Central Bank’s 2% target and lower than economists had expected. While construction-specific inflation remains influenced by labour availability, materials and project delivery costs, easing headline inflation should help improve business confidence and may reduce pressure on financing and borrowing costs over time.

Meanwhile, international oil prices have fallen to their lowest level in several months as concerns over supply disruptions have eased and markets anticipate increased global production. Lower energy prices have the potential to reduce fuel, transport and logistics costs across the construction supply chain and may provide some relief for contractors operating heavy plant and vehicle fleets.

What this means for construction

The latest economic indicators point to a more supportive operating environment for Ireland’s construction sector. Strong underlying domestic demand continues to underpin investment in housing, infrastructure and commercial development, while easing inflation across the euro area and lower oil prices could help reduce pressure on fuel, transport and other input costs. Although challenges around labour availability, planning and project delivery remain, the broader economic backdrop is becoming increasingly favourable for sustained growth and investment across the industry.

For contractors, consultants and clients alike, the latest figures provide further evidence that the sector remains well positioned to support Ireland’s continued economic growth, with improving market conditions offering cautious optimism for the months ahead.

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