New CIS forecast shows Irish construction market set to grow 10% by 2027, powered by renewed housing activity and record public investment in infrastructure, education and health.

Ireland’s construction market is expected to return to robust growth from 2026 onwards, with the total value of project starts (projects under €100m) forecast to rise by 11% in 2026 and a further 10% in 2027, according to the new ‘Construction Industry Forecast 2026–2027’ from CIS, powered by Hubexo.

The report shows that, despite a muted 1% increase in 2025, the value of project starts in Ireland is projected to expand from €16.6bn in 2024 to more than €20.4bn by 2027. Growth will be driven by renewed residential activity and stepped-up public investment in infrastructure, education and health.

Civil engineering and commercial projects are set to lead the way, with project-start values projected to grow by 20% by 2027. They are followed by 15% growth in education and 10% growth in community, hospitality and sport projects. The residential sector is expected to deliver a more modest 5% cumulative growth by 2027.

Economy expected to grow steadily

Economic conditions remain broadly supportive. The Central Bank of Ireland expects GDP growth of 10.1% in 2025, with continued expansion in modified domestic demand and a strong labour market underpinning construction activity through 2026 and 2027.

Unemployment is forecast to remain below 5%, while inflation is expected to hover around 1.4–1.8% over the forecast horizon, creating a relatively stable cost environment for the industry.

Dave Thompson, VP for UK and Ireland at CIS, said, “After an exceptional surge in housing commencements in 2024 and a pause in 2025, the Irish construction market is poised to move back onto a solid growth path. A combination of strong underlying demand, particularly for housing, and higher government capital allocations is set to support double-digit increases in project starts through 2027.”

Residential market: A pause in 2025 before renewed growth

Ireland’s housing market remains under intense pressure from a growing population and strong economic performance. A temporary waiver of certain connection and development levies encouraged a large spike in commencements in 2024, when an estimated 138,120 units were started. The surge in starts was driven by temporary waivers on water connections and levies paid to councils, provided that works are completed by the end of 2026.

With many schemes brought forward into 2024, the value of residential project starts is expected to retreat by around one-fifth in 2025. Having doubled last year, the value of residential project starts is expected to fall back by 29% during 2025, and just 7,896 new homes commenced in the first nine months of 2025.

However, approval activity has remained resilient. Residential permissions in the first nine months of 2025 are around 10% higher than a year earlier, pointing to a return to growth from 2026 onwards. CIS forecasts a 10% increase in the value of residential starts in 2026 and a further 5% in 2027.

The development pipeline has remained firm, with the value of residential approvals during the first nine months of 2025 up 10% on the same period a year earlier. This strengthening pipeline, combined with the positive economic outlook, is expected to support renewed sector growth during 2026 and 2027.

Dave Thompson added, “The pull-back in 2025 is best seen as a breather after an extraordinary year for housing starts. With a solid pipeline of approved schemes and continued policy focus on the housing shortage, we expect residential activity to pick up again from 2026.”

Public investment to power non-residential and civil engineering growth

Government capital spending is set to be a major engine of growth over the forecast period.

Budget 2025 included a record €11.8bn allocation for education, with capital funding rising to around €1.3bn to support hundreds of new and ongoing building projects. Budget 2026 has taken this further, increasing capital allocations again. CIS expects the value of education project starts to jump by more than 70% in 2025, followed by additional growth of 10% in 2026 and 15% in 2027.

Health spending is also being ramped up, with capital expenditure increasing from approximately €1.5bn in 2024 to €1.83bn in 2025. A strong planning pipeline – detailed consents in the sector have risen sharply since 2023 – is expected to translate into a near two-thirds surge in the value of health project starts in 2025 and continued growth in 2026 and 2027.

Nearly €15bn has been earmarked for capital expenditure in 2025 in civil engineering and infrastructure projects to tackle infrastructure gaps affecting competitiveness, supported by a significant one-off tax windfall. CIS forecasts that civil engineering starts will rise by 11% in 2025 and then accelerate by 20% in both 2026 and 2027 as transport, utilities and other major schemes move on site.

Commercial, industrial and retail: Steady but uneven recovery

The outlook for private non-residential sectors is more mixed but broadly positive.

Ongoing uncertainty around global trade policy, particularly for major exporting industries such as pharmaceuticals, medical devices and food, is expected to keep industrial project starts slightly below 2024 levels in 2025. CIS projects a 3% decline in 2025, followed by modest growth of around 4% per year in 2026 and 2027.

In the commercial sector, Dublin’s office market is recovering as employers refine hybrid working models and focus on high-quality, Grade A space. After a strong rebound in project starts in 2025, a relatively thin pipeline is likely to constrain growth in 2026, before activity strengthens again in 2027.

Rising household incomes and population growth have supported robust retail sales, with grocery-led, community-focused formats acting as a key driver of construction demand. CIS forecasts an almost 50% increase in the value of retail project starts in 2025, followed by further, albeit slower, growth in 2026 and 2027 as online shopping continues to reshape demand for traditional retail space.

Expert insights

The full findings and many more sector-by-sector breakdowns are available in the new Construction Industry Forecast 2025–2027 from CIS. Packed with expert insights, the report delivers tailored, data-driven intelligence to help construction industry professionals in Ireland grow their business, mitigate risk and make well-informed strategic decisions.

Key insights from the CIS Construction Industry Forecast 2026–2027 (Ireland)

Overall market growth

• Total value of project starts (projects under €100m) forecast to grow by 11% in 2026 and 10% in 2027.
• Market expansion from €16.6bn in 2024 to over €20.4bn by 2027.
• Sector performance to 2027 (by value of project starts)

, Civil engineering & commercial: ~20% growth by 2027.

• Education: ~15% growth by 2027, with a jump of 70% in 2025 alone.
• Community, hospitality & sport: ~10% growth by 2027.
• Residential: more modest 5% cumulative growth by 2027 after a sharp 2024 spike and 2025 pull-back.

Residential market dynamics

138,120 housing units estimated to have commenced in 2024, driven by temporary waivers on water connections and development levies (for projects completed by end-2026).

Residential approvals remain robust: value of residential approvals in the first nine months of 2025 is 10% higher year-on-year, supporting CIS forecasts of +10% residential starts in 2026 and +5% in 2027.