Northern Ireland is entering 2026 with its strongest construction performance in a decade and a half, according to the latest findings from AECOM.

The buildings and infrastructure consultant, which has been operating across the island of Ireland for more than 165 years, said construction output rose 7.3% on the year to June 2025, reaching a 15-year high in Q2 - outperforming the rest of the UK.

The organisation’s Ireland Annual Review 2026 said 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.

Activity is being driven in part by exceptionally strong repair and maintenance performance, now 55.8% above pre-pandemic levels, alongside a 25.9% 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 UK’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,” said Nick Perrin, head of infrastructure, surface transportation, aviation and ports, UK and Ireland at AECOM. “We have the ambition and the momentum, but delivery now depends on readiness - 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.”

The report also shows that costs have largely stabilised, with material prices flat and labour costs increasing 5.5% due to intense regional competition for skills. New work remains 7% 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 £70m Fermanagh Lakeland Forum, set to become Northern Ireland’s first ultra-energy-efficient leisure facility; the £100m Belfast Stories cultural and tourism destination; the £671m 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% in 2026, ahead of the UK’s 2.3%. Growth is expected to be led by repair and maintenance, rising 5.1%, while new work is projected to increase by 1.4%,supported by stronger gains in private non-housing (5.5%) and infrastructure (4.2%).

AECOM adds  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.

Click here to read the full report.