AECOM, the trusted global buildings and infrastructure leader, operating in Ireland for more than 165 years, will launch its 2026 review of the Irish construction industry on Thursday 15 January. In this year’s review of the market and construction costs, AECOM sets out the challenges and opportunities facing the Irish construction and infrastructure sector. It highlights readiness as the essential enabler of Ireland’s ambition to deliver major housing and infrastructure programmes at pace and scale, alongside actions being taken by the Government to remove delivery barriers.

Now in its 51^st year, the report also provides a leading benchmark for expected inflation for the construction industry which is forecast at 3 per cent for 2026.  

John O’Regan, Director and Country Lead for the Republic of Ireland at AECOM, said: “The Republic of Ireland’s record level of funding for infrastructure projects, alongside a proactive government approach throughout 2025, reflects a clear commitment to strengthening national resilience and accelerating delivery. The Accelerating Infrastructure Action Plan, released in December 2025, sets out a programme of reform aimed at speeding up the provision of infrastructure.

“These measures are in the early stages of implementation; hence the existing deep-rooted constraints continue to slow progress. Delivery agencies are now managing pipelines at an unprecedented scale, within a system that remains well funded on paper but constrained in practice. 2026 must be a year of delivery readiness if the Republic of Ireland is to meet its social and economic goals. Strong public finances provide the foundation, but readiness provides the capability to deliver consistently and confidently. 

“The conditions exist to advance essential housing and infrastructure programmes. While capability will take time to build, strengthening readiness internally and across the delivery ecosystem will allow organisations to manage constraints, accelerate timelines and meet Ireland’s urgent delivery needs, making readiness a critical enabler for accelerated delivery.” 

Ireland Annual Review 2026

The Ireland Annual Review 2026 covers both the Republic of Ireland and Northern Ireland. It finds that while economic conditions remain generally favourable and record funding is available in the Republic of Ireland, structural and capability constraints continue to limit housing and infrastructure delivery. 

In the face of these challenges, the industry’s usual ‘can-do’ attitude and resilience are being tested. ‘Report fatigue’ is growing at every level. Further delays in delivering critical infrastructure risk discouraging international contractors from entering the Irish market – and may prompt more Irish contractors and consultants to follow those who have already sought opportunities abroad. 

Key factors influencing development in Ireland in 2026 include: 

1. AECOM expects construction industry output will grow by c. 4 per cent in volume terms in 2026. The outlook for tender prices in 2026 is likely to reflect the recent gradual upward trend in consumer inflation. AECOM forecasts a 3 per cent increase in tender price inflation for 2026. 
    
2. The Irish Government has taken proactive steps to drive output and activity, continuing the steady increase in capital spending – with Budget 2026 allocating €5.2 billion in funding to housing alone – alongside measures intended to encourage private investment. The Accelerating Infrastructure Taskforce was established in 2025 to tackle the barriers hindering infrastructure development, and published its Report and Action Plan in December to outline reforms to address legal, regulatory, and delivery and coordination challenges. 

3. Global conflicts and geopolitical instability continue to influence supply chains, investor confidence and private-sector engagement. While supply chains have shown resilience, a climate of uncertainty has weighed heavily on investment decisions in the economy, which in turn impacts construction output. 

4. Public and private sector projects face complicated and sequential approval processes. Each stage typically passes through multiple gateways, and statutory approvals are frequently extended further by appeals and judicial reviews. These processes contribute to extended project timelines and introduce uncertainty, creating challenges for the timely delivery of critical infrastructure and housing programmes.

5. The residential sector is the largest individual sector in the construction industry and thus is a key driver of overall output and activity. While Government measures – including Budget 2026 allocations of €5.2 billion and The Land Development Agency (LDA) planning and acquisitions – aim to address supply, systemic challenges remain. With the sector continuing to underperform targets and outturn figures for completions likely falling well below the level of demand. Viability issues, limited private investment and gaps in water, energy and transport infrastructure continue to impede the conversion of planning permissions into completed developments. 

The report calls for the need to prioritise readiness to secure Ireland’s ability to deliver its ambitious pipeline of major projects, programmes and portfolios at pace. Defined as ‘strategic preparation’, readiness encompasses an organisation’s internal capability, such as having the right skills, systems and governance in place, as well as external factors like selecting appropriate procurement strategies and the provision of pipeline certainty to aid workforce attraction and retention. AECOM argues that achieving readiness will be key to managing constraints, accelerating timelines and delivering the outcomes Ireland urgently requires.

AECOM concludes that with strong public finances, continued private investment and a resilient construction sector, the foundations exist to deliver development projects to support economic growth. The critical task is strengthening readiness internally and across the delivery ecosystem to unlock Ireland’s housing and infrastructure potential as swiftly and proactively as possible.

AECOM

---