• Double-digit gains in 2024 underscore a year of economic expansion, with positive trend expected to continue in 2025
• AECOM expects trend for lower, less volatile price growth to continue in 2025, forecasting a 2.5% rise in tender price inflation
• Only housing output bucked otherwise positive trend, falling 5% in 2024, with AECOM calling for targeted investment in water infrastructure to unlock market potential

BELFAST (January 17, 2025) — Northern Ireland enters 2025 with optimism and momentum, underpinned by political stability, long-term government strategies, and a steadier economic environment, according to AECOM — the trusted global infrastructure leader that provides professional services across a range of sectors in Northern Ireland.

The organisation’s eagerly anticipated Ireland Annual Review 2025 highlights the region’s standout performance across key sectors, forecasts for the year ahead and calls for continued strategic, programmatic thinking to sustain progress.

“Northern Ireland has shown remarkable resilience and growth, outperforming all other UK regions with a 10.5% increase in annual construction output,” says Jody Wilkinson, AECOM’s Northern Ireland Director. “This trend looks set to continue in the coming year, as Northern Ireland breaks free from its short-term economic mindset. With longer-term comprehensive spending plans on the horizon, the construction sector is kicking off 2025 in a stronger, more stable position than a year ago. With projects in Northern Ireland being integrated into all-island programmes of long-term work, there is the potential for a more joined-up approach to infrastructure planning and delivery.”

Key Findings

The report reveals a 10.5% annual rise in construction output from Q2 2023 to Q2 2024, driven by a 6.3% increase in new work and a 17.7% surge in repair and maintenance year on year. Tender price inflation stabilised at 1.8% in 2024, following two years of unusually high rates, with a predicted rise to 2.5% in 2025, aligning with broader economic trends.

Export strengths also stood out, with Northern Ireland continuing its long-standing capabilities in docks-based physical exports. Strong performance in plant, machinery, and vehicle production reflects the region’s ability to adapt to global decarbonisation demands.

Tourism potential remains significant too, with cross-border tourism between ROI and NI more than tripling over the past decade, presenting considerable opportunities for collaboration and economic growth.

Environmental progress was another highlight. The report notes a 3% decrease in CO2 emissions in 2022 compared to 2021, contributing to a longer-term reduction of 26.4% since 1990. Local councils and businesses are leading efforts to achieve net-zero targets.

Areas for Improvement

Dampening the good news was the housing construction sector’s 5% decline in 2024, attributed to ageing drainage and wastewater infrastructure, which has been identified as the primary bottleneck for housebuilding. AECOM calls for targeted investment in these systems to unlock significant market potential.

Biodiversity also emerged as a key focus area in 2024, with opportunities for collaboration and technology to enhance Northern Ireland’s natural and built habitats.

Further Sectoral Highlights

Further progress was noted across several other sectors. In healthcare work is set to begin this year on the New Children’s Hospital in Belfast.

In education significant investment is anticipated this year, with tenders for multiple new schools expected, paving the way for sectoral growth over the next decade.

Belfast city centre retail and hospitality benefited from a 3.7% year-on-year increase in footfall, boosting investor confidence. June 2024 marked a record-breaking month for Belfast hotels, with revenue per available room reaching an all-time high.

AECOM emphasises the need for a programmatic approach, which is described as a series of interconnected projects that align under common objectives to maximise impact. It says strategic long-term planning, political leadership, and cross-sector collaboration are essential for achieving cost efficiencies and enduring benefits. “Infrastructure needs champions – political and otherwise – to drive a joined-up approach,” Mr Wilkinson continued. “Northern Ireland has proven its resilience. Now it’s time to take that forward-thinking attitude and embed it in our planning and delivery to ensure a prosperous, sustainable future.”

The full report is available here: https://publications.aecom.com/ireland-annual-review/