Northern Ireland construction ready to rebound
Belfast City HallAs we approach the year end, Construction Information Services (CIS), an Irish supplier of construction industry market intelligence, estimates that construction activity in Northern Ireland will have crashed by 17% in 2025.
However, it predicts that recovery will begin in 2026 with 2% growth, accelerating to 10% in 2027. This will still leave Northern Ireland construction well behind where its was in even 2024, but at least it will be growing.
Private housing construction is set to lead the way, forecast to grow by 39% in 2026 and a further 18% in 2027, following a modest 3% increase this year.
The office sector has emerged as a bright spot in 2025, with project starts growing by 42% as demand for high-quality commercial spaces continues. As with the rest of the UK, new hybrid working policies are bringing people back to offices on a more consistent basis, driving demand for Grade A facilities. Growth is expected to continue at 18% in 2026, though starts are forecast to decline by 14% in 2027 as the development pipeline moderates.
The hospitality sector has also performed strongly, with hotel and leisure project starts surging by 174% in 2024, with growth remaining robust at 56% in 2025. A 47% decline is projected for 2026 following reduced approvals, though a rebound of 11% is anticipated in 2027.
Education sector starts are estimated to have declined by 30% in 2025 and are predicted to drop another 11% in 2026, before starting to recover with 2% growth in 2027. Health sector starts are forecast to fall 13% in 2025 and 28% in 2026, though a 10% recovery is projected for 2027 as budget allocations take effect.
Civil engineering starts are expected to decline by 21% in 2025 with a further 6% decline in 2026, before recovering with 24% growth in 2027.
The industrial and retail sectors face continuing headwinds as well. Industrial starts are forecast to decline by 57% in 2025 and by a further 15% in 2026, due to geopolitical uncertainty and cost pressures. The sector is expected to recover slightly in 2027 with 3% growth.
Retail construction starts are forecast to decline by 17% in 2025 and a further 19% in 2026 despite a 10% increase in retail planning approvals and 4.7% growth in retail output during Q2 2025. Recovery is expected in 2027 with a 10% increase in projects starting on site.
CIS vice president Dave Thompson said: "While 2025 has been a challenging year for Northern Ireland's construction sector, the fundamentals for recovery are in place. Strategic government investment in infrastructure, education and healthcare, combined with improving economic conditions, will drive renewed growth from 2026 onwards. Firms that position themselves now to capture opportunities in emerging sectors will be best placed to benefit from this recovery."
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