AECOM’s Ireland Annual Review 2026, launching on Thursday 15 January, highlights:
- Northern Ireland’s construction output rose 7.3 per cent on the year to June 2025, reaching a 15-year high in Q2, outperforming the rest of the United Kingdom.
- Costs have stabilised as tender price inflation flattened at 3 per cent and supply chains matured, though labour costs rose by 5.5 per cent.
- Housing output increased by 25.9 per cent over the year, but wastewater infrastructure remains the key barrier to unlocking planned growth and meeting long-term need.
Northern Ireland is entering 2026 with its strongest construction performance in a decade and a half, according to the latest findings from AECOM, the trusted global buildings and infrastructure leader, operating across the island of Ireland for more than 165 years.
The organisation’s Ireland Annual Review 2026, now in its 51st year, set to release on Thursday 15 January,notes that construction output rose 7.3 per cent in the year to June 2025, reaching its highest level since 2010 and outperforming the rest of the U.K. at 2.2 per cent.
The Review observes that the return of political stability in 2024 helped restore confidence and unlock stalled plans, providing the platform for the construction sector’s strong rebound.
Now in its 51st year, the Review reveals activity is being driven in part by exceptionally strong repair and maintenance performance, now 55.8 per cent above pre-pandemic levels, alongside a 25.9 per cent increase in housing output, which accounted for more than a third of total activity in Q2 2025.
However, only one new social housing start was recorded over the year, far below what is required to meet long-term needs. With more than 49,000 households on waiting lists and wastewater constraints blocking new development in Belfast, Newry and Derry-Londonderry, the Review stresses that Northern Ireland cannot deliver on its 15-year housing strategy without systemic infrastructure reform.
The Review argues that Northern Ireland needs clearer long-term funding, more collaborative delivery models, earlier supply-chain involvement, stronger public-sector capacity alongside a reimagining of public-private partnerships, and faster planning and consenting processes. These priorities match the wider all-island focus on creating systems that can turn investment into results.
It adds that Northern Ireland stands to benefit from the finalised Investment Strategy for Northern Ireland 2050, which will build on the U.K.’s 10-year Infrastructure Strategy, but without greater readiness, it may struggle to turn this long-term investment into real outcomes. A clear roadmap will help unlock investment, accelerate progress and strengthen communities across the country.
“Northern Ireland enters 2026 from a position of real strength, with output, sentiment and sector performance all moving in the right direction. We have the ambition and the momentum, but delivery now depends on readiness,” said Nick Perrin, Head of Infrastructure, Surface Transportation, Aviation and Ports, U.K. & Ireland, at AECOM.
“2026 must be a year of delivery readiness. Strong investment and renewed political clarity provide the foundation, but readiness provides the capability. Northern Ireland’s potential for growth is significant, and it must seize this dynamic moment and make the most of the opportunities ahead.”
Across both jurisdictions, AECOM identifies ‘readiness’ as the critical enabler of faster, more consistent delivery. 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 the island of Ireland urgently requires.
The report also shows that costs have largely stabilised, with material prices flat and labour costs increasing 5.5 per cent due to intense regional competition for skills. New work remains 7 per cent above pre-pandemic levels, and private non-housing is expected to be one of the fastest-growing sub-sectors into 2026, aligning with wider trends across the island of Ireland.
Wastewater infrastructure remains the single biggest constraint on housing delivery, while planning and regulatory delays continue to slow the progress of essential infrastructure. Public-sector and supply-chain resource shortages further limit delivery pace, and short-term budgeting cycles make it difficult to plan and commit to long-term capital programmes with confidence.
Despite fiscal pressures, the public sector continued to deliver new community assets throughout 2025. Major projects advanced during the year include the £70 million Fermanagh Lakeland Forum, set to become Northern Ireland’s first ultra-energy-efficient leisure facility; the £100 million Belfast Stories cultural and tourism destination; the £671 million Children’s Hospital at the Royal Victoria Hospital; and Ulster University’s Sports Air Dome, an all-island shared space initiative.
Looking ahead, the Construction Industry Training Board (CITB) forecasts Northern Ireland’s construction output to grow by 2.8 per cent in 2026, ahead of the U.K.’s 2.3 per cent. Growth is expected to be led by repair and maintenance, rising 5.1 per cent, while new work is projected to increase by 1.4 per cent, supported by stronger gains in private non-housing (5.5 per cent) and infrastructure (4.2 per cent).
AECOM concludes that while the foundations for growth are strong, the pace at which Northern Ireland can deliver homes, water infrastructure, energy systems and transport improvements will now depend on system-wide readiness across the public sector and supply chain.
Register at the following link by 15 January to get access to an advance copy of the Ireland Annual Review 2026: https://insights.aecom.com/insights/ireland-annual-review
