Northern Ireland’s construction sector continues to carry the heaviest workloads in the UK, but a sharp fall in new enquiries and a deepening labour shortage are putting future growth at risk, according to the latest State of Trade Survey from the Federation of Master Builders (FMB) and the Chartered Institute of Building (CIOB).
Workloads in Northern Ireland posted a net balance of +35% in H2 2025, leading the UK and broadly steady against +36% in H1 2025. However, new enquiries tumbled to +12% from +64% in the first half of the year, the steepest drop among the home nations and a sign of growing uncertainty.
Builders report firm demand across repair, maintenance and improvement, and house building, but hiring difficulties, rising costs and mounting delays are squeezing SMEs that underpin Northern Ireland’s construction industry.
Skills pressures intensify:
- 72% of firms were affected by a shortage of skilled tradespeople in H2 2025 (up from 61% in H1), leading to job delays (49%) and cancelled projects (22%).
- 30% said the skills gap halted plans to expand their business.
- The toughest vacancies to fill were carpenters (30%), bricklayers (29%) and plumbers/HVAC (23%).
- Specialist capabilities remain scarce: 51% struggled to hire workers with knowledge of the building safety regime, 57% with sustainable building practices, and 58% with new technologies.
- 58% found it difficult to recruit staff with conservation/heritage expertise, while 56% struggled to source workers familiar with new planning proposals.
Costs squeeze margins:
- 75% of firms reported higher material costs in H2 2025.
- 57% experienced wage increases, and 61% raised their prices to keep up.
- The consequences were stark: 51% reported lower-than-expected profits or losses, 34% curbed recruitment, 20% feared for business viability, and 16% made redundancies.
Delays and payment challenges:
- 40% said extreme weather or climate events caused project delays, with 36% citing planning delays, 35% market uncertainty and 31% material or equipment hold-ups.
- Only 57% of Northern Ireland builders said invoices were paid within agreed terms, while 13% reported invoices are often paid late.
Outlook remains cautiously upbeat despite headwinds: 48% are positive about the first half of 2026, compared with 8% who are negative and 38% neutral. Policy concerns persist, with 47% expecting changes to National Insurance contributions to adversely affect construction, and 46% anticipating a negative impact from the Chancellor’s recent Budget.
Gavin McGuire, FMB Northern Ireland Director commented: "It's encouraging to see Northern Ireland leading the UK with strong workloads in H2 2025. However, the sharp 52 percentage point drop in enquiries is deeply concerning, as this is often a key indicator of future work. Conversations I'm having daily with members confirm they're battling through a perfect storm of rising costs, economic uncertainty, and clients hesitating to commit to projects."
McGuire continued: "What's particularly frustrating is that FMB members are being held back by issues entirely outside their control. Over 100 areas in Northern Ireland cannot support new development connections due to wastewater capacity constraints. This is a crisis we've been warning about for years, and it's now directly constraining housing delivery and economic growth. The recently announced 'Developer Contributions' scheme risks becoming little more than an additional tax on construction, failing to support the SME contractors who are the backbone of our industry. We need urgent, meaningful investment in water infrastructure, not more delays and half-measures."
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