Northern Ireland
Northern Ireland entered 2026 with a construction market that felt more stable, more predictable, and noticeably more confident than even 12 months ago. Major public sector programmes, especially in health and education, continue to anchor the region while housing demand is outstripping supply.
We’re also seeing the benefit of a wider easing of cost pressures. Tender price growth settling around 3% reflects calmer supply chains and more predictable material costs, though pressure remains around skilled labour, which continues to be the main inflation driver.
For clients, this creates a window of opportunity: a market that is busy but not overheated, where programmes can be shaped with greater certainty and where early engagement is still the most effective way to secure the right delivery partners. The fundamentals for medium-term growth are clearly in place – provided planning and infrastructure bottlenecks, particularly around wastewater, continue to be addressed.
MARKET CONDITIONS & PIPELINE
Market confidence boosted by strong pipeline of work in health, education, residential and industrial sectors
From a delivery perspective, Northern Ireland’s market feels active but stable. Contractors’ order books remain healthy, driven by substantial public sector investment and consistent activity across Belfast and the wider region. RLB’s market intelligence shows that Belfast continues to benefit from major flagship schemes that give the supply chain confidence to plan ahead and allocate resources effectively.
This stability is reinforced by broader economic performance: construction output grew 7.3% in the year to June 2025. Repair and maintenance activity has surged well beyond pre‑pandemic levels, while housing output has risen substantially despite well‑documented infrastructure constraints.
Looking ahead, the pipeline carries momentum into 2026 and 2027 across the health, education, residential and industrial sectors. The new Children’s Hospital in Belfast and the Strule Shared Education Campus alone represent hundreds of millions of pounds of committed investment and will continue to shape market conditions for the next few years.
Residential delivery remains the big opportunity. Private housing starts are expected to accelerate by 39% in 2026 but planning and wastewater constraints remain a drag on the pace of delivery, with thousands of homes delayed or prevented from progressing.
RLB Market Activity Cycle
The RLB Market Activity Cycle is a representation of the development activity cycle for the construction industry.
RLB considers 10 sectors to be representative of the construction industry as a whole. Each sector is assessed as to which of three activity level zones – peak, mid or trough – best represents the current status of the sector within the cycle. This assessment is then refined by identifying whether the current status is in a growth phase or a decline phase.
The subjective current performance of sectors is identified by ascribing one of the coloured arrows (shown in the legend of the chart) to each sector. NB: In this analysis, sectors are not individually weighted.
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Market sector activity analysis: UNITED KINGDOM
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of multiple regions enables the calculation of a national representation of percentage of sectors in each phase of the cycle at a point in time.
Market sector activity analysis: NORTHERN IRELAND
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of a region enables the calculation of a regional representation of percentage of sectors in each phase of the cycle at a point in time.
TENDER PRICES
- Tender pricing is showing a welcome degree of maturity. With material costs settling and supply chains behaving more predictably, inflation is tracking at roughly 3%, which aligns with UK‑wide expectations.
- Labour availability remains the key pressure point, but this is no longer causing the volatility we saw in previous years.
- Clients who plan procurement early and allow space for meaningful contractor engagement are securing the best outcomes.
▉ RLB Northern Ireland
▉ BCIS (National) TPI ▉ BCIS (GBCI)
▉ Competitors' range (High & Low)
INPUT COSTS
- Contractors remain selective, driven by full pipelines and strong demand from public sector programmes. The biggest single pressure on cost continues to be labour, particularly MEP and masonry trades, with wage inflation running at around 5.5% due to persistent skills shortages.
- Materials, by contrast, are relatively steady, and we are no longer seeing the sharp month‑to‑month swings that characterised previous years. Subcontractor markets remain firm, especially in specialist packages like MEP where capacity is tight.
- Plant and logistics costs remain stable, with no significant risks emerging. The key message is that labour, not materials, is shaping inflationary behaviour in Northern Ireland today.
SECTOR FOCUS
Commercial
The office market has been one of Northern Ireland’s stronger performers, with a 42% increase in starts in 2025 driven by demand for Grade A, hybrid‑ready space. We anticipate growth will continue into 2026 before moderating in 2027. Belfast’s ongoing regeneration momentum is central to this, but longer‑term performance will depend heavily on planning efficiency and wider economic stability.
Healthcare & Education
These sectors remain the most reliable pillars of the region’s pipeline. The Children’s Hospital and Strule Shared Education Campus developments continue to drive significant workload, supported by strong public sector capital allocations. Health project starts reached £505m in early 2025, while education saw a 200% uplift in 2024. Both sectors are expected to maintain momentum as estates strategies progress.
Industrial
The industrial sector is benefiting from sustained activity in manufacturing, logistics and life sciences. Sector value is projected to reach £234m in 2026, with further growth into 2027. While planning volumes dipped slightly, the fundamentals remain robust: demand for modern, efficient industrial accommodation is strong, and the pipeline supports continued expansion.
Residential
Private housing is where we expect the most meaningful upswing. After a difficult 2025, the sector is now positioned for a 39% rise in starts through 2026, with further growth into 2027. The constraint is not demand but infrastructure, particularly wastewater capacity, which continues to delay thousands of planned homes across key urban areas. Developers remain active, but real progress depends on systemic fixes.
CASE STUDY
Alpha Housing
RLB is providing Alpha Housing with cost and project management services to support its delivery of much-needed quality social housing across Northern Ireland.
Two apartment block developments currently on site and due for completion by March 2026 are Parkside Gardens, Belfast, and Main Street, Cullybackey, Ballymena, which together will create nearly 40 new homes.
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