Turner & Townsend’s Spring 2025 Market Intelligence Report highlights contractor-proposed solutions to workforce challenges amidst stable but cooling market conditions
Irish contractors operating across multi sectors, including infrastructure, are calling for enhanced education initiatives, international recruitment drives, and revised immigration policies to address persistent skilled labour shortages, according to Turner & Townsend’s Spring 2025 Market Intelligence Report released today. The quarterly survey, which captures market conditions for Q1 2025 and was conducted prior to the recent announcement of increased US tariffs – and subsequent U-turn -, reveals that workforce challenges remain the primary concern for the construction industry despite overall market stability.
“Industry respondents are clear about what needs to happen on the ground.” said Philip Matthews, Managing Director for Ireland at Turner & Townsend. “From promoting construction careers in secondary schools to developing targeted immigration pathways for skilled workers, contractors have proposed actionable steps that could make a real difference. The industry wants to work with government to establish a sustainable talent pipeline.”
The report shows that whilst the Irish construction market remains largely stable, with 73% of respondents characterising conditions as “staying the same,” there is a notable shift in sentiment with 18% perceiving a cooling market—up from 11% in the previous quarter. Only 9% reported warming conditions for future growth.
Industry-Proposed Solutions to Skilled Labour Shortages
Contractors highlighted several key strategies to address the workforce crisis:
- Education and Youth Engagement: Multiple respondents emphasised the need to “increase awareness within secondary schools to showcase construction trades as a smart career choice” and “focus on training and incentivising young people” to enter the industry.
- Immigration Reform: Contractors suggested government action to “issue more skilled visas” and implement programmes to “attract skilled workers from abroad” through “international marketing” campaigns.
- Diversity Initiatives: Several responses highlight the importance of “promoting women in construction” to expand the potential talent pool.
- Enhanced Incentives: Respondents noted that “government needs to focus on attracting young people through more targeted efforts and better incentives” to make construction careers more appealing.
Key Market Indicators
Despite the skilled labour challenges, the report indicates relative stability in other areas:
- Costs and Inflation: Material and labour costs are experiencing moderate inflation, with 64% of respondents reporting marginal increases in material costs and 45% noting similar rises in labour expenses.
- Operating Capacity: Current operating capacity stands at 80% across surveyed contractors, indicating reasonable demand but with capacity for additional work.
- Order Books: Whilst short-term security appears strong (73% for 2025), there is decreasing certainty for longer-term periods, at 43% for 2026 and just 22% for 2027.
- Government Policy: Nearly a quarter of respondents (24%) rated government policies as “least effective,” with no respondents rating policies as “most effective,” signalling notable dissatisfaction with current policy frameworks.
The industry is currently concerned about potential impacts from US trade policies; US trade wars will inevitably have an effect on materials prices but as yet unknown.
Philip Matthews commented, “We are maintaining a watching brief on the trajectory of US tariffs, notwithstanding the recent, albeit temporary relief. The potential impact on material costs and supply chains will be closely monitored in our upcoming quarterly reports.”
Sector Activity
The housing sector continues to dominate the Irish construction market, representing 55% of market activity, split between private housing (32%) and public housing (23%). Schools and colleges account for 23% of sub-sector activity, with commercial offices (9%), healthcare facilities (9%), and data centres (5%) rounding out the major areas of focus.
The report also notes that the governmental transition has slowed commitment from Approved Housing Bodies (AHBs) in progressing high-density residential projects, though most view this as a temporary situation related to the election cycle rather than a fundamental shift.
“The timing of this survey coincides with the critical first 100 days of our new coalition government,” remarked Philip Matthews. “The industry’s proposed solutions to skill shortages demonstrate an eagerness to engage with policy-makers and share project-informed insights that could contribute to a more resilient and capable construction workforce to meet Ireland’s housing and infrastructure needs.”
