Planning Permission Outlook for NI Construction Recovery
Northern Ireland’s construction sector is rebounding after a turbulent 2025, with new project starts and planning permission activity on the rise.
Despite a challenging start to the year, the latest industry forecasts show a strong recovery in Northern Ireland’s construction market. Total project starts dipped just 2% in 2024, but new data reveals a stabilising sector with a projected surge in 2026. Construction starts are forecast to climb from £1.55 billion in 2024 to £1.58 billion in 2025 and £2.7 billion in 2026. This growth is driven by significant capital investment and a robust public sector pipeline, particularly in health and education projects.
Non-residential construction is set for a 3% rise in 2025 and a dramatic 79% increase in 2026. Industrial project values reached £206 million in 2024, while office starts more than doubled last year, with 31 new projects receiving planning permission in the first quarter of 2025. Analysts expect this momentum to continue as procurement frameworks stabilise and sector capacity improves. The health and education sectors are leading the resurgence, with major investments in the public estate fuelling optimism.
While the overall outlook is positive, recent quarterly data shows some short-term caution. Project starts in Q3 2025 fell sharply to £422 million, down 51% year-on-year, with main contract awards and planning approvals also declining. However, the pipeline for health and education projects remains strong, providing resilience. The sector’s recovery is further supported by a 36% increase in workloads for construction firms and improving sentiment among builders, according to a recent survey by the Federation of Master Builders and Chartered Institute of Building.
Despite the upturn, industry experts warn of rising risks, including delays and cost escalation disputes. A shortage of skilled tradespeople is affecting 77% of builders, leading to project hold-ups and cancellations. SMEs are particularly vulnerable to contractual issues and payment delays, highlighting the need for proactive risk management and early legal review of contracts. As the sector accelerates, careful attention to environmental impact and compliance with planning regulations will be crucial for sustainable growth.
Key drivers of the recovery include:
- Strong public sector investment in health and education infrastructure
- Increased planning permission activity for office and industrial projects
- Stabilising procurement frameworks and improving sector capacity
- Government support for housing schemes and flood-risk development mitigation
- Focus on environmental impact assessments for new developments
With a healthy pipeline of projects and renewed confidence, Northern Ireland’s construction sector is well-positioned for growth. However, ongoing challenges around skilled labour and supply chain disruptions mean that careful planning and compliance with An Bord Pleanála decisions and environmental impact requirements will be essential for continued success.
For developers and planners, the current climate offers opportunities for new housing scheme approvals and infrastructure projects, but also demands vigilance regarding material contravention risks and the need for robust contractual documentation.
Originally reported in on Tue, 02 Dec 2025 09:20:53 +0000. Full story
