Northern Ireland's construction sector maintains the strongest workloads in the UK, yet a dramatic fall in new enquiries and deepening skills shortages threaten future growth.
Northern Ireland's construction industry maintained the strongest workload growth across all UK home nations in H2 2025, but new enquiries plummeted and the skills crisis intensified, threatening to undermine future performance, according to the latest State of Trade Survey from the Federation of Master Builders (FMB) and the Chartered Institute of Building (CIOB).
Overall workloads in Northern Ireland remained robust with a net balance of +35% in the second half of 2025, leading the UK and remaining stable compared to +36% in H1 2025. However, enquiries fell dramatically to +12%, down from +64% in the first half of the year, marking the sharpest decline across all home nations and signalling significant uncertainty ahead.
Northern Ireland builders continue to report strong current demand across repair, maintenance, improvement and house building sectors, but mounting challenges around recruitment, costs and project delays are putting pressure on SMEs, who form the backbone of Northern Ireland's construction industry.
Skills crisis deepens across the sector
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72% of firms were affected by a lack of skilled tradespeople, up from 61% in H1 2025, leading to job delays (49%) and cancelled projects (22%).
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30% of firms said the skills shortage halted plans to expand their company.
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The hardest trades to recruit were carpenters (30%), bricklayers (29%) and plumbers/HVAC trades (23%).
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Specialist skills remain scarce: 51% of firms struggled to hire workers with knowledge of the building safety regime, 57% with sustainable building practices, and 58% with new technologies.
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58% of firms found it difficult to recruit staff with knowledge of conservation/heritage techniques, while 56% struggled to find workers with knowledge of new planning proposals.
Rising costs squeeze builders' margins
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75% of firms reported rising material costs in H2 2025.
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57% experienced wage increases, while 61% raised the prices they charge to keep pace with costs.
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The impacts of cost pressures are severe: 51% reported lower-than-expected profits or losses, 34% restricted recruitment, 20% feared for business viability, and 16% made redundancies.
Delays and payment challenges add to pressure
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40% of firms said projects were delayed due to extreme weather or climate events, while 36% cited planning delays.
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35% pointed to market uncertainty as a cause of delays, and 31% to material or equipment delays.
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Only 57% of Northern Ireland builders said invoices were paid within agreed terms, while 13% reported invoices are often paid late.
Outlook remains cautiously positive
Despite mounting pressures, Northern Ireland builders remain more optimistic than pessimistic: 48% have a positive outlook for the first half of 2026, compared with 8% who are negative and 38% who are neutral.
However, concerns about policy changes are evident: 47% expect changes to National Insurance contributions to have a negative impact on the construction industry, and 46% expect the Chancellor's recent budget to negatively affect the sector.
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."
