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Internal Market, Industry, Entrepreneurship and SMEs
Ireland - ECSO country fact sheet
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Over the 2010-2020 period, Ireland GDP increased by 87.4%, from EUR 188.8 billion in 2010 to EUR 353.8 billion in 2020. This represents an increase of 5.9% as compared to the 2019 levels (EUR 334.2 billion). In 2021, the country’s GDP is forecast to grow significantly by 14.6% (Y-o-Y), reaching EUR 405.3 billion.

Reflecting this macroeconomic trend, the number of enterprises in the Irish broad construction sector considerably increased by 13.1% between 2010 and 2020, totalling 83,577. This growth was mainly driven by the increase in the number of enterprises in the real estate activities (+65.0%), and the architectural and engineering activities (+36.0%) sub‑sectors over the same reference period.

In parallel, the volume index of production in the broad construction sector recorded an increase of 31.4% during 2015-2020, mainly driven by a 39.2% increase in the construction of buildings, offsetting the decline registered in the construction of civil engineering (-4.0%), over the same reference period.

Similarly, turnover in the broad construction sector in Ireland amounted to EUR 41.9 billion, which is a 54.9% increase compared to 2010 (EUR 27.1 billion). It further increased to EUR 42.8 billion in 2020, representing an increase of 58.0% compared to the 2010 level. This overall increase was mainly driven by the turnover growth in the architectural and engineering activities (+89.4%), the narrow construction (+51.5%), manufacturing (+37.5%), and the real estate activities (+25.2%) sub-sectors.

Moreover, the gross operating rate of the broad construction sector, which gives an indication of the sector’s profitability, stood at 16.2% in 2018, demonstrating the significant recovery of the sector since the 2010 level of -12.0%. This is below the EU‑27 average of 16.7%.

In terms of employment, there were 212,287 persons employed in the Irish broad construction sector in 2020, marking an increase of 36.0% compared to the 2010 level (156,119 persons). This was mainly driven by the growth registered in the number of persons employed in the real estate activities (+88.2%), the architectural and engineering activities (+65.4%) and the narrow construction (+26.5%) sub-sectors between 2010 and 2020.

13.1%
Number of enterprises in the broad construction sector between 2010 and 2020
58.0%
Turnover in the broad construction sector between 2010 and 2020
26.5%
Number of persons employed in the narrow construction sub-sector between 2010 and 2020

The Irish construction sector suffers from a shortage of skilled labour, requiring an additional 40,000 to 50,000 new construction workers until 2027. This will be a key challenge to address, to ensure the growth of the construction sector. To address this issue, the government has launched several initiatives including the National Skills Strategy 2025 and Action Plan for Jobs, which aims at improving and expanding workers’ skills, including digital skills.

Another pressing issue in Ireland is housing, given the increasing homelessness due to shortages of social housing. The government has taken a range of measures to support housing supply, including the construction of social housing. As part of Project Ireland 2040, EUR 7.5 billion has been allocated for the 2022-2027 period in the National Development Programme (NDP). The NDP aims at investing EUR 11.6 billion over the 2018-2027 period to facilitate the delivery of 112,000 additional social housing homes.

In October 2021, the Irish government announced a budget of EUR 6.0 billion for the Department of Housing, Local Government and Heritage for the year 2022 . 

This includes EUR 4.0 billion to be spent on housing for all, the single biggest allocation for housing investment by any Irish Government ever in a year.

In addition to the housing market, the civil engineering market is expected to drive part of the development in the Irish construction sector. More specifically, the government is expected to support the development of public infrastructure such as roads, schools, rail, hospitals, housing and other vital societal construction. In October 2021, the Irish government announced the largest national development plan in the history of the state as it introduced spending proposals for the next decade (2021-2030). The plan includes a total investment of EUR 165.0 billion until 2030 on various capital projects such as housing and transport infrastructure. The investment will consist of extra money for cross‑border projects, with capital funding for the government's Shared Island initiative to be "at least doubled" to EUR 1.0 billion until 2030.

Under its EUR 989.0 million Recovery and Resilience Plan (RRP), Ireland has allocated EUR 164.0 million for the electrification and upgrade of Cork commuter rail and EUR 155.0 million for energy efficiency in residential and public building. 

The plan also supports the digitalisation of businesses, mainly of small and medium sized enterprises (SMEs) in Ireland, with an investment of EUR 85.0 million. Also, the Irish plan promotes digital skills by providing connectivity and information and communications technology (ICT) equipment to disadvantaged learners in schools (EUR 64.0 million), as well as by supporting the development of digital skills in Irish education at all levels.

Lastly, as part of the RRP, the government has also allocated EUR 27.0 million to support access to the labour market for jobseekers and EUR 114.0 million to support the reskilling and upskilling of workers with a strong focus on green, digital and future‑proof skills.

The Irish construction sector has an overall positive outlook. Non-residential and civil engineering market are expected to be the primary growth drivers. Public sector infrastructure, digitalisation, a shift towards a circular and green economy, backed by EU funding, are expected to dominate the sector’s growth.