However, cost inflation in Ireland is tracking slightly ahead of the rest of Europe, with a range of 2.5-3.5% anticipated this year, largely driven by ongoing skilled labour shortages, particularly those with specialised electrical and MEP skills, which is impacting project timelines, says Linesight.

Construction commodities have remained relatively stable in the Irish market. However, US and Europe tariff negotiations are a growing cause for concern, as uncertainty remains on components sourced from the US, which present ongoing risks, especially regarding lead times and procurement certainty, and may negatively impact overall project costs.

A focus of this report is the growing strain on power infrastructure. As energy-intensive sectors expand, the availability of reliable electricity is becoming a critical challenge. To tackle energy constraints and enhance sustainability, mission-critical sectors are adopting new ways of accessing power. These include renewable self-generation, Corporate Power Purchasing Agreements (CPPAs), self-generation and battery storage.

Grid congestion, caused by insufficient transmission capacity to meet power demand, is exacerbated by ageing infrastructure, increased peak-hour demand, and decentralised renewable energy. A grid transition index for 2024 by GLOBSEC, which evaluates the readiness of 35 European countries for the green energy transition shows Ireland as only ‘partially prepared, significantly behind some of our European neighbours including the UK and France.

The report also highlighted key opportunities and considerations from a sectoral perspective, including; Data Centres and Life Sciences.

The data centre development landscape in Ireland is experiencing significant growth with Dublin remaining the focal point for development. However, access to power remains a challenge, and as such alternative power sources are under review by some operators. For example, it is reported that in 2024 Microsoft entered into a corporate power purchase agreement with SSE Renewables and FuturEnergy Ireland to offtake the 30MW output of wind energy capacity via the Lenalea Wind Farm in County Donegal. Furthermore, a pilot project in Dublin will use green hydrogen fuel cells to power a data centre’s control building. Vantage are also investing over €1bn to develop a multi-phase campus in Dublin with its own on-site power generation.

Another sector on a growth trajectory is life sciences, which saw €1.2bn invested in research and development start-ups across Europe during the first quarter of 2025. There is a growing trend of life sciences manufacturing companies leveraging existing manufacturing sites to expedite market entry, adapt quickly to demands and alleviate current market uncertainties. However, until there is greater clarity on the tariff landscape across Europe, export performance may be hindered, posing a risk to future capital investment.

Follow Irish building magazine on LinkedIn for the latest news and updates.