CIF Construction Outlook for Ireland: Q2 Showed Resilience and Firms Optimistic For Q3

The CIF’s quarter three 2026 Construction Outlook Survey shows that construction activity in Ireland remained resilient in quarter two 2026, supported by strong growth in exports. According to the survey, cost pressures have eased from earlier in the year but continue to weigh on margins.

Based on responses from 159 construction companies, the survey shows turnover, new orders and employment all recording stable to modest growth, with more firms expecting increases than decreases across every key indicator for Q3.

Export activity was particularly strong, with 67% of exporting firms reporting a year-on-year increase in turnover in Q2, driven by data centres, pharmaceutical facilities, and roads and transport projects, and 57% expecting further growth in Q3.

Cost inflation has moderated compared with earlier quarters, with fewer firms reporting increases in raw material, labour and pricing costs than at the start of the year, although a majority still expect further rises. Public works participation remains limited, with 40% of firms expecting to carry out no public sector work in Q3, and low margins and administrative burden cited as the main barriers to greater involvement.

Commenting on the Q3 findings, Andrew Brownlee said, “Out latest research among the sector points to an industry that continues to perform well, with export activity in particular delivering some of the strongest results we have recorded. Cost pressures have eased since the start of the year, which is welcome, but they remain high enough to affect margins on projects across every sector.

“The area that requires most attention is public works. Four in ten firms are carrying out no public sector work at all, and the reasons given, low margins, price-based tendering and administrative burden, are within Government’s ability to address.”

Key survey findings

Exporting Construction Services

• 67% reported a year-on-year increase in turnover from exports in Q2 2026.
• 57% expect export turnover to increase further in Q3 2026, led by data centre, pharmaceutical and roads/transport projects.

Business Turnover

• 27% reported a year-on-year increase in turnover in Q2 2026.
• 28% expect turnover to increase in Q3 2026.
• Turnover remained broadly stable, with General Building Contracting and Home Building recording modest net growth; expectations for growth were positive across every sector.

New Orders

• 26% reported a year-on-year increase in revenue from new orders in Q2 2026
• 28% expect further growth in Q3 2026.
• Growth was strongest in Civil Engineering/Infrastructure and Specialist Contracting, while Home Building saw a net decline; Specialist Contracting expects the strongest increase ahead.

Our ‘Marketing to Ireland’s Construction Market’ section includes details of principal contractors, housebuilders, architects and other specifiers. The feature also provides details of
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Costs and Pricing

• Around 90% reported an increase in raw material costs in Q2 2026, down from 94% the previous quarter, with 80% expecting further increases in Q3, down from 96%.
• 76% reported an increase in labour costs, with 60% expecting further increases in Q3, down from 66%, particularly among Home Building firms and larger contractors.
• 62% reported an increase in project pricing, with 55% expecting further increases in Q3, down from 72% – the most moderate pace in several quarters.
• Concern over raw material costs as a key business challenge fell 10 points quarter-on-quarter; concern over securing a healthy profit margin remains the third most-cited challenge; and concern over disruption to supply chains fell 31 points from Q2 2026.

Employment

• 28% reported a year-on-year increase in employment in Q2 2026, with the strongest gains among larger firms.
• 23% expect to increase staffing levels in Q3, with 68% anticipating no change; hiring intentions remain led by larger firms (€4.5m+ turnover), while smaller firms (under €300k) expect employment to remain flat.

Public Works

• 39% of firms carried out no public works in Q2 2026, and 40% expect none in Q3.
• Only 21% expect their level of public works involvement to increase over the next 12 months, while 7% expect a decline.
• Low margins, administrative burden and the cost of tendering are the most frequently cited barriers to greater participation.

Andrew Brownlee said, “The construction sector enters Q3 2026 with positive momentum, supported by strong export performance and cost inflation that, while still elevated, has moderated from earlier in the year. The clearest constraint on the industry’s capacity to deliver is public works participation, with four in ten firms carrying out no public sector work at all. CIF is calling for reform of public procurement to broaden participation and support the pace of housing and infrastructure delivery.”

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