The latest CEF Construction Survey signals a strong call from Northern Ireland's construction sector for the Executive to agree a four-year capital budget, as flat profit margins and a resurgence of inflation weigh on confidence at the start of 2026.

The survey, spanning the second half of 2025, gathered responses from NI‑headquartered contractors, civil engineers and homebuilders with a combined annual turnover of around £3.5bn.

Results show revenue rose for most firms over the year: 15% reported turnover up by at least 25%, and 40% saw increases of 10% or more. However, margins largely stalled, with only 15% improving, 50% unchanged and 35% deteriorating. About 70% of respondents operated at full or near‑full capacity. Inflationary pressures are returning, with 70% citing a moderate but manageable impact and 20% reporting a serious financial effect.

The sector's top asks of the Executive for 2026 are to agree a multi‑year capital budget for consultation through to 2030, with full agreement by the end of March; take decisions to ensure NI Water's next Price Control (PC28) is fully funded; and use existing revenue‑raising powers to expand the overall budget. Firms also view Great Britain and the Republic of Ireland as more attractive markets due to a more secure pipeline, opportunities to grow in new markets and stronger profit margins. On skills, priorities include promoting construction careers in schools and communities, mapping skills needs with tailored training, and expanding entry‑level programmes.

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Commenting on the findings, Mark Spence, Chief Executive of the Construction Employers Federation, said: "As we begin the last full year of this NI Executive and Assembly mandate, it is crucial that Ministers take decisions based on the best long-term interests of Northern Ireland. For our part, this means the immediate agreement of a four-year multi-year budget for capital spending. While no-one is questioning the challenges associated with the level of finance available to the Executive, it is nonetheless critical that Ministers use the opportunity to set a four-year programme to its full effect. Anything short of this would be seen as a significant failure.

"The need for budget certainty is made even more stark as our survey reflects a waning confidence within the sector as a result of stagnating profit margins and returning inflationary concerns in a way not seen since the end of 2023. When coupled with our housebuilding crisis which is a result of the decades of underinvestment in our water and wastewater systems, contractors, civil engineers and homebuilders look out on a local horizon which is filled with significant roadblocks to growth.

"A fully agreed four-year multi-year budget can, at the very least, give assurance to the deliverability of public sector pipelines to the end of the decade and enable Government Clients and contracting firms to plan against this in a way that we haven't seen for over fifteen years.

"Any such agreement does not, however, negate the urgent need for the Executive to seriously consider additional revenue raising for the explicit purpose of growing their capital budget. While the baseline capital available to the NI Executive is to increase from £2.2bn this year to £2.4-£2.5bn for each of the next four financial years, and there will be further discussions on a new fiscal framework which could modestly increase those allocations further, it is implausible that the NI Executive could meet the recurrent capital needs of all the Government Clients within such a financial envelope.

"As the detailed work commences on NI Water's next Price Control which will come into effect in 2028, we again call on Ministers to act on the CEF joint position paper with the NI Chamber of Commerce and NI Federation of Housing Associations from last summer which proposed a potential way forward which includes the introduction of a low-cost Infrastructure Levy, along with other measures. Our proposal, which is progressive in nature, protects those most vulnerable in our society while also charting a sustainable path towards dealing with an issue which is now the principal inhibitor to economic growth and accelerant of environmental decline that we face."

"The decisions made in this last full year of this Executive and Assembly will inform the electorate as to the seriousness of our local politicians to face up to, and take concerted action to avert, the ever-deepening infrastructure investment crisis that will define our economic potential."