SECTOR PERFORMANCE AND OPPORTUNITIES

State-backed housing and education sectors driving market activity

SECTOR

Across sectors, housing remains the dominant performer at 56 percent nationally. Within this category, public housing is outperforming private residential delivery for the first time, highlighting the increased reliance on state-backed programmes.

Public works and education, particularly schools and colleges, are also performing strongly, while activity in private commercial and industrial sectors is more subdued. This represents a notable shift from 2024, when contractors identified private housing as the top-performing segment.

National output data from the Central Statistics Office show that, as of Q2 2025, overall construction output fell by 0.5 percent quarter-on-quarter but rose by 6.2 percent year-on-year. Within this, residential building increased by 1.8 percent in the quarter, while civil engineering declined by 12.4 percent, though this subsector still recorded a 12.5 percent annual increase. This data underlines the continuing strength of residential output and the volatility of infrastructure delivery.

"Private residential “on hold” pending confidence/financing improvements."

ROI MI survey respondent

PROCUREMENT

Procurement data show that single-stage and two stage tendering remain the most common approach at 28 percent, negotiated tendering at 26 percent and framework tender in at 17 percent indicates a diverse spread of procurement strategies across projects and sectors.

Average order-book coverage stands at 86 percent for 2025, 61 percent for 2026 and 29 percent for 2027, revealing a solid short-term workload but declining medium-term visibility. This signals that project starts are not keeping pace with capacity.

In terms of cost composition, contractors report typical allocations of 13 percent preliminaries and 7.0 percent overhead and profit on a medium-sized commercial project (5,000 m² GFA). Around half of respondents indicate that profit levels remained unchanged over the past quarter, suggesting that cost stability has not yet translated into margin improvement. While competition remains strong, average margins are narrowing as contractors price aggressively to secure work.