2025 Ireland construction trends

Rising wages due to a shortage of skilled workers will continue to influence commercial construction costs and could hinder Ireland's ambitious targets to build an average of 50,500 homes a year until 2029. According to the BNP Paribas' latest Construction Purchasing Managers Index, wages have risen from -2.2% to +11.7% in the last 12 months, indicating stronger competition to recruit scarce labour in the sector.¹

According to a study conducted by The Build Up Skills Ireland, the industry needs to recruit nearly 120,000 skilled construction workers and reskill more than 160,000 by 2030 to meet Ireland’s housing and climate targets. However, the demand for bricklayers, carpenters, plasterers, and painters and decorators may decrease if there is widespread adoption of more modern methods of construction which are more productive than traditional building methods.²

Commercial construction tender prices rose by 1.5% in the first half of 2024, with over three-quarters (78%) of quantity surveyors anticipating that tender prices will continue to increase. 20.5% expect prices to remain the same, while only 1.5% foresee a decrease. But whilst Ireland's national rate of commercial construction price inflation is now running at 3%, it has eased considerably in recent years, falling from 6.2% in June 2023 and 11.5% throughout the whole of 2022.³

This positive development is reflected by a more competitive commercial construction market, reduced-price volatility for construction materials, along with reductions in energy and fuel costs. The ongoing risk of skills shortages though is most likely to drive up the cost of construction in the future unless new entrants such as plumbers, electricians and steel erectors are attracted to the industry.

Small tool theft has been a longstanding challenge in the construction industry and has now reached epidemic proportions driven, in part, by Ireland's cost-of-living crisis. Although the rate of inflation is falling, prices in Ireland are the second highest in EU, standing 42% above the average, creating challenging living standards and financial pressures for many.⁴

It is estimated that over €100,000 worth of tools are being stolen from tradespeople every month by criminal gangs, who then sell them on at markets in border counties. Small tools, such as portable power tools, survey equipment and hand tools, are particularly vulnerable to being stolen as they are often seen as easy targets. Members from one particular gang have been linked to a €600,000 crime spree alone across six counties throughout Ireland.⁵

New legislation will see Building Information Modelling (BIM) lead construction's digital transformation. BIM is a process of creating and managing information using virtual models, which is transforming the way construction projects are planned, designed and managed.

Effective January 2024, the Irish government has mandated that BIM-enabled processes must be integrated into the design and construction phase for large public works projects exceeding €100m. Over a four-year period, this legislation will eventually be expanded to encompass the involvement of consultants and contractors for projects below €1m.⁷

BIM processes are delivering tangible efficiencies through reduced project design and construction costs, in addition to further savings if BIM is extended into the building management and operation stages. Other benefits of BIM include improved collaboration between construction contractors, reduced errors, and enhanced project visualisation.

Major public sector infrastructure projects which have utilised BIM in recent years include a new children’s hospital in Dublin, the M11 Gorey to Enniscorthy motorway and improvements to Dublin airport.

Modern Methods of Construction (MMC), such as modular and prefabricated buildings, are expected to play a pivotal role in addressing Ireland’s housing crisis.

The Irish government has recently set a new housing target of building an average of 50,500 homes per year between 2025 and 2030 – an ambitious aim, surpassing the previous target of an average of 33,000 homes for the same period.⁹

Modular construction is an innovative approach which involves fabricating building components in a factory before assembling them on-site, reducing project timelines by 20% to 50% due to fewer delays caused by poor weather conditions and human error. Despite modest take-up so far, the prefabricated construction market in Ireland is expected to grow by 8.5% annually over the next four years, reaching €2.52bn by 2028.¹⁰

Embracing faster, smarter and more efficient MMC methods could be fundamental to meeting the government’s bold plans to build 303,000 new homes by 2030 whilst meeting sustainability targets by using low and zero-carbon materials.

From design to occupancy, prefabricated homes can be constructed in a matter of weeks in comparison to six to 12 months it takes for a traditional home. These time savings could be vital in light of a recent Central Bank report which estimates that between 52,000 and 67,000 new homes could be needed per year to meet emerging demand into the middle of the century.¹¹

Modular construction also requires fewer workers on-site compared to traditional construction method because the majority of the building components are prefabricated in a controlled factory setting. However, off-site prefabricated manufacturing facilities require substantial upfront costs and a constant throughput of work to provide a return on investment.

Innoovative technology, such as the 3D printing of concrete, could revolutionise construction’s drive towards sustainability by reducing material use and carbon emissions during production methods. 3D printing is a modern method for manufacturing construction elements or entire buildings by means of a 3D printer producing concrete, polymer, or other materials, layer-by-layer.

By optimising material use to reduce wastage for concrete and steel by up to 40%, 3D printing addresses many of the environmental challenges associated with traditional construction methods. In doing so, this approach ensures that the printed materials are used only where they are needed, reducing both weight and embodied carbon.¹²

From September 2024, Ireland has mandated the use of low-carbon cement for all state-funded construction projects such as roads, schools, and hospitals to support a more sustainable and resilient future. The government’s Climate Action Plan aims to halve emissions by 2030 and reach net-zero by no later than 2050.¹³

However, Ireland is currently set to reduce its total greenhouse gas emissions by only 29% by 2030, compared with the legally-binding target of 51%, and could face a fine of €8.2bn from the European Parliament based on this current trajectory.  ¹⁴