Ireland’s construction sector is entering the second half of 2026 with a strengthening economic backdrop. The latest CSO Annual National Accounts confirm that Modified Domestic Demand, widely regarded as the most reliable measure of Ireland’s underlying economic activity, grew by 4.7% in 2025. Crucially for the sector, construction recorded Gross Value Added growth of 7.2%, the strongest performance of any major industry. These figures confirm that the fundamentals supporting construction investment remain firmly in place.

The CSO data, read alongside the latest Irish Building Magazine Top 50 Contractors League Tables, tells a compelling story of sectoral momentum. Combined turnover among Ireland’s top 50 main and specialist contractors reached €20.74 billion in 2025, up from €18.4 billion the previous year. Three forces explain the continued confidence: a domestic demand environment growing well above trend, a diversified contractor base extending into international markets, and a cost outlook showing signs of moderation as European inflation begins to ease.

The Top 50 turnover growth reflects activity across housing, infrastructure, healthcare, life sciences, advanced manufacturing and data centres, demonstrating the breadth of opportunity available to well-positioned firms. The increase from €18.4 billion to €20.74 billion in a single year represents a gain of more than 12% in combined contractor revenues, underscoring the scale of construction’s contribution to Ireland’s economic output. For boards assessing pipeline risk, the diversity of this activity base is as significant as the headline figure.

On the cost side, conditions are improving cautiously. Eurostat’s flash estimate for June 2026, published on 1 July, shows euro area inflation easing to 2.8%, down from 3.2% in May and the lowest reading since February. Energy inflation moderated from 10.8% to 8.7% over the same period, the component with the greatest direct bearing on construction fuel and transport costs. While these remain early signals, they point toward a more stable input cost environment in the second half of 2026.

Construction leaders should act with strategic clarity. Firms should use improving conditions to lock in long-term supply agreements at or near current pricing, building cost certainty into construction projects running through 2027. Boards should translate the Top 50 turnover momentum into sustained investment in workforce capacity and digital capability, ensuring the sector absorbs continued output growth without compromising margins. All expansion should be supported by risk frameworks that protect the pipeline underpinning sustainable construction activity at home.

Ireland’s construction sector is performing with genuine distinction. GVA growth of 7.2%, combined revenues exceeding €20 billion, and a more favourable inflation outlook together point to a sector that is ready to deliver at the scale Ireland’s housing, infrastructure and commercial ambitions require. Organisations that invest decisively and plan with discipline will define the next chapter of Irish construction.

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