Active and Optimistic: What the CIF Q2 2026 Outlook Survey Tells Construction Leaders About Managing the Cost Cycle

Ireland’s construction sector is holding its ground with resolve. The Construction Industry Federation Q2 2026 Construction Outlook Survey, based on responses from 138 companies and published on 3 June, confirms that the sector remains broadly stable, with improving sentiment around turnover and forward orders. Cost pressures are real and rising, but the underlying activity data signals a sector that is managing the challenge and building for what comes next.

The CIF findings are frank about the environment, and CIF chief executive Andrew Brownlee captures the prevailing mood well: construction firms remain active and cautiously optimistic, but cost pressures and structural constraints are increasingly impacting delivery. Three dimensions define the current moment: a materials cost surge feeding directly into project pricing, a labour cost environment requiring sustained workforce investment, and a public works participation gap that represents both a challenge and a clear strategic opportunity.

The cost data is striking in its breadth. Some 94% of firms reported an increase in raw material costs in Q1 2026, while 96% expect further increases in Q2. Labour costs are rising sharply too, with 74% of companies reporting year-on-year increases and 66% anticipating further rises in the months ahead. Two-thirds of firms reported increased project pricing in Q1, with 72% expecting prices to continue rising into Q2 as contractors work to absorb sustained inflationary pressures across their cost bases.

Activity levels tell a more encouraging story. Employment remains broadly stable, with 22% of firms increasing staffing in Q1 and 65% anticipating no change in the quarter ahead, reflecting confidence in the medium-term pipeline. Growth is expected to be strongest in specialist contracting and civil engineering, while home building remains relatively stable. Export activity is a further positive, with most exporting firms reporting increased turnover in Q1, reinforcing the global competitiveness of Irish construction firms operating across international markets.

The public works picture requires the most attention. Close to half of respondent firms reported no public works activity in the previous three months, with low margins, price-based tendering and bureaucratic procurement processes cited as the key constraints. Only 21% of firms expect to increase their public works involvement in the year ahead. For a sector with an ambitious national housing and infrastructure agenda to deliver, this gap demands direct action from both industry and government.

The CIF survey is ultimately a portrait of resilience under pressure. Ireland’s construction sector is not standing still: it is hiring, pricing, exporting and planning for growth while absorbing the most sustained cost cycle in several years. Organisations that invest in procurement discipline, engage government on public works reform and sustain their workforce pipelines will be best positioned to deliver the infrastructure and homes Ireland’s future growth requires.

(The views expressed by the writer are his/her own and do not necessarily reflect the views or positions of BusinessRiver.)