Republic of Ireland market intelligence: stability despite anticipated tariff impacts
Our spring 2025 market intelligence report indicates continued stability in Q1 2025 for the Republic of Ireland's construction industry, as the market begins to feel the impacts of the new government's first 100 days.
Increasing cooling reflects concerns about potential economic headwinds
Our report indicates a growing perception of market cooling, suggesting shifting sentiment among industry participants. This is possibly reflecting concerns about policy direction or economic headwinds.
Despite this, we are seeing a largely steady market, with the majority of respondents characterising conditions as 'staying the same'. However, 18 percent perceive a cooling trend, up from 11 percent in our autumn Q3 2024 report.
It’s important to note that the survey was conducted before the introduction of imposed tariffs, which could potentially lead to sudden cost surges in the global construction sector.
Tender price inflation projections show a gradual easing
Material and labour costs are experiencing moderate inflation, with the majority reporting marginal increases in material costs and 45 percent noting similar rises in labour expenses. These pressures, while persistent, represent a moderation from the more aggressive inflation seen in previous years.
Tender price inflation projections show a gradual easing, forecasted at 3.3 percent for 2025, gradually declining for subsequent years through to 2028, according to contractor forecasts.
Housing sector remains the outlier, while hospitality emerges
Sector performance in Q1 2025 shows a nuanced picture of the construction industry in Ireland. Housing remains the primary driver of activity, accounting for 55 percent of market activity, with private housing leading at 32 percent.
This is supported by significant contributions from education, corporate occupier, healthcare and data centres. The procurement landscape is varied, reflecting a balanced approach to managing project risks and achieving value.
Hospitality emerges as a particularly strong sector, indicating positive trends in the market.
Future outlook is steady but cautious
The future outlook for the Irish construction market in 2025 is characterised by cautious stability and modest growth. Addressing the structural challenges of labour shortages, planning bottlenecks and the transition to sustainable practices will be essential for unlocking growth potential and meeting Ireland's housing and infrastructure needs.
The industry must navigate these challenges while adapting to new government policies and potential global economic impacts, such as imposed tariffs.
