The Investing in Irish Construction & Materials report indicates that the Irish construction sector has momentum, with Euroconstruct forecasting a 5% output growth in 2026 for the industry, twice the Western European average.

Confidence for the future of Irish construction is positive, with the latest AIB Ireland Construction PMI for February showing a strong outlook over the next 12 months. The headline total index returned to growth in the month, while house building activity stabilised and commercial activity expanded. Most notably, new order growth reached a four-year high and input purchasing nearly reached its highest level in four years.

Total employment in the Irish construction sector has grown significantly to 192,000 in Q4 2025, a 9.1% increase year on year, following four months of consecutive employment growth. The increase in construction sector jobs mirrors acceleration in homebuilding due to record demand and signals market confidence, with Government measures including reduced VAT and tax deductions on apartment construction helping to fuel growth in the industry as it flexes to meet the Government’s target of 50,000 housing units constructed per year.

This momentum is evidenced by efforts from publicly listed companies, who are capitalising on Ireland’s growing reputation as one of Europe’s most attractive construction markets. Irish homebuilders Cairn Homes and Glenveagh Properties remain two of the biggest providers of residential housing in the country. Repair, Maintenance and Improvement (RMI) companies also show growth and investment in Ireland, for example, Grafton Group, who derive 60% of operating profit from the island, and Howden Joinery, who expect to open five new depots across Ireland by the end of 2026 bringing their total network in the country to 21.

Heavy material suppliers of cement and stone are also expanding their exposure in Ireland, with US-listed global giant CRH reporting that Ireland now accounts for c. 2% of group revenues and UK-listed Breedon Group stating that the Island of Ireland generated 23% of EBITDA in 2025. Separately, global building materials player and Cavan-based business Kingspan continues to generate over €230 million of revenue from the Irish construction market, despite the Irish sector representing just 2.5% of group sales.

Repair, Maintenance and Improvement (RMI)
While residential new build activity increases, Repair, Maintenance and Improvement (RMI) show tangible signs of progress as it lags new build growth. The rise in granted planning permissions for extensions and alterations signals a strengthening pipeline of RMI activity, with latest CSO figures for Q4 2025 granted permissions at the highest level in at least a decade, excluding the heightened Covid period. This renewed momentum suggests growing confidence among homeowners aiming to invest in upgrading and expanding their properties, providing a solid foundation for continued growth in the sector.

Infrastructure
The allocated €275 billion under the new National Development Plan provides a clear pathway to increased infrastructure spend. With an existing infrastructure gap of c.25% per capita relative to other European countries, structural changes to address bottlenecks surrounding energy, housing, transport and water constraints have never been greater. The Accelerating Infrastructure reform agenda, alongside the NDP, clearly set out how these issues can be addressed which are essential for growth and enabling wider opportunities amidst the technology and AI boom.

Data Centres 
The data centre and AI infrastructure boom continues at pace and will continue to be a key structural driver of growth, with pressure mounting on the country’s power, water and grid systems. This is channelling significant incremental capital into infrastructure to ensure Ireland remains competitive in attracting next-generation AI-driven digital infrastructure. Demand in Ireland is continually led by hyperscale firms (Amazon, Microsoft, Meta, Apple, Oracle and Alphabet), who show no signs of slowing growth.

Current projections to 2027 indicate the annual capital expenditure of hyperscalers is set to rise c. 76%, underscoring the strength of their pipeline even as grid constraints shape the pace and location of delivery. While policy changes have been positive, capacity constraints must be addressed to urgently capture the €5 billion worth of investment from the hyperscalers pipeline.

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