- Ireland Annual Review 2025 highlights benefits of programmatic thinking which is being increasingly adopted by Irish State bodies in building and infrastructure projects
- AECOM expects 5% growth in output volume in 2025 after some years of mixed performance
- Tender price inflation will continue to cool, with AECOM forecasting national average of 3% in 2025
- Housing starts in 2024 exceeded 50,000 but progress may be impaired by viability challenges and insufficient supporting infrastructure, blocking the conversion of permissions into completed developments
DUBLIN (January 17, 2025) – AECOM, the trusted global infrastructure leader, operating in Ireland for over 150 years, launches its 2025 review of the Irish construction industry. In its latest review of the market and construction costs, AECOM outlines the challenges and opportunities for the Irish economy and in particular proposes an approach, Programmatic Thinking, to support a higher volume and faster delivery of critical infrastructure projects and help address the gap in productivity identified by the Irish Fiscal Advisory Council between the construction industries in Ireland and other European countries.
The 2025 Ireland Annual Review report delves into construction industry performance, trends and forecasts for the year ahead covering both the Republic of Ireland and Northern Ireland. Key factors influencing construction projects and infrastructure development in 2025 in the Republic of Ireland include:
- AECOM forecasts 5% growth in output volume in 2025 after some years of mixed performance. Inflation is still a feature of the market, but tender price inflation will continue to cool in 2025 and is expected to be in the order of 3%.
- The Republic of Ireland’s economy is strong, however, addressing the construction industry productivity gap of 30% compared to other European countries is essential for long-term competitiveness.
- The adoption of ‘Programmatic Thinking’, already in use on projects by Iarnród Éireann, the HSE, the Land Development Agency and Uisce Éireann, provides an approach to drive greater efficiency and enhanced delivery timelines on major State infrastructure projects.
- A range of factors including extended planning and mobilisation periods mean that construction projects in Ireland are taking longer to complete. AECOM’s research indicates that adopting a programmatic approach to managing large-scale projects can accelerate construction timelines.
- There were 54,574 housing starts in the first 11 months of 2024, however, record levels of state investment need to be matched by similar levels of growth in investment from the private sector to meet the huge demand for homes. Continuing viability challenges and lack of supporting water, energy and transport infrastructure are the biggest issues facing the market and could hinder the conversion of existing residential planning permissions into completed developments.
- Despite ambition and available capital to deliver national infrastructure projects, the availability of a skilled workforce will continue to be a challenge for the Irish economy in 2025. This includes a less-reported undersupply of contractor management and supervision resources, and staff in professional services firms.
John O’Regan, Director and Country Leader for the Republic of Ireland at AECOM said: “Ireland’s strong economic performance and record government investment in housing and infrastructure reflect a nation building for the future. However, delivering on these ambitions requires a coordinated, programmatic approach to ensure that housing, transport, water, and energy systems develop in tandem. With the construction sector at the forefront of this transformation, we have a unique opportunity to address critical challenges, drive sustainable growth, and enhance Ireland’s competitiveness on the global stage.”
The full report is available here: https://publications.aecom.com/ireland-annual-review/
