Northern Ireland’s construction sector has been forecast to return to growth in 2026 following a sharp contraction this year, according to analysis from data intelligence firm Construction Information Services (CIS).

In its latest market forecast, CIS said project starts are expected to decline by 17 per cent in 2025 amid geopolitical instability and economic pressures.

However, it added that activity is projected to recover with two per cent growth in 2026, followed by a 10 per cent rise in 2027.

“While 2025 has been a challenging year for Northern Ireland’s construction sector, the fundamentals for recovery are in place,” said Dave Thompson, CIS vice-president for the UK and Ireland.

“Strategic government investment in infrastructure, education and healthcare, combined with improving economic conditions, will drive renewed growth from 2026 onwards.”

Private housing is expected to lead the recovery, with output forecast to rise by 39 per cent in 2026 and 18 per cent the following year. The sector suffered in 2025 from political uncertainty, affordability issues and water infrastructure constraints, CIS said.

The office sector in Northern Ireland bucked the wider market downturn in 2025, with a 42 per cent increase in project starts driven by demand for high-quality, hybrid-working-enabled space.

Office construction growth will continue at 18 per cent in 2026 before a 14 per cent fall in 2027, CIS predicted.

Hotel and leisure work surged by 56 per cent in 2025, although a 47 per cent fall is forecast for 2026 due to reduced approvals. A modest recovery of 11 per cent is expected in 2027.

The education and healthcare sectors saw sharp declines in 2025, with falls of 30 per cent and 13 per cent respectively.

Both are forecast to contract further in 2026 before recovering in 2027 as public investment takes effect.

The Northern Ireland budget has allocated £270m in capital funding for education and £933m for infrastructure, including roads, public transport and energy, CIS noted.

Civil engineering is also forecast to improve in 2027, with a 24 per cent rise in project starts following two years of contraction.

Meanwhile, industrial and retail construction continue to face headwinds.

Industrial project starts are forecast to fall 57 per cent in 2025 and 15 per cent in 2026, recovering slightly in 2027 with three per cent growth.

Retail starts are projected to fall 17 per cent in 2025 and 19 per cent in 2026 before recovering by 10 per cent in 2027.

In contrast, community and amenity work has seen strong growth, with starts rising 101 per cent in 2025.

Growth is expected to continue at 70 per cent in 2026 before a nine per cent decline in 2027.

Source: CIS announcement