Construction industry urges reform of public procurement as four in 10 firms not participating

Construction Industry Federation holding annual conference at Croke Park today

Andrew Brownlee, CEO, Construction Industry Federation. Picture Conor McCabe 

Around four in every 10 building firms are carrying out no public sector construction work, with lower margins and the burden of increased red tape cited as key disincentives.

The Construction Industry Federation Construction Outlook survey published on Wednesday shows that construction activity remained resilient in the second quarter of the year between April and June, supported by strong growth in exports and easing of cost pressures. 

But participation in public works projects remained limited, according to the survey, with 40% of firms expecting to carry out no public sector work, and low margins and administrative burden cited as the main barriers to greater involvement. “The area that requires most attention is public works. Four in 10 firms are carrying out no public sector work at all, and the reasons given, low margins, price-based tendering and administrative burden, are within Government's ability to address," said CIF chief executive Andrew Brownlee. 

"CIF is calling for reform of public procurement to broaden participation and support the pace of housing and infrastructure delivery.”

Overall, the CIF outlook based on responses from 159 construction companies, showed new orders and employment recording stable to modest growth, with more firms expecting increases than decreases across every key indicator for Q3.

It found 67% of exporting construction service firms reported a year-on-year increase in turnover from exports in the second quarter of the year. This was driven by work on data centres, pharmaceutical facilities, and roads and transport projects. Some 57% of firms surveyed expected further growth in Q3.

Cost inflation moderated compared with earlier quarters, with fewer firms reporting increases in raw material, labour, and pricing costs than at the start of the year, although a majority still expect further rises. 

“Our latest research among the sector points to an industry that continues to perform well, with export activity in particular delivering some of the strongest results we have recorded. Cost pressures have eased since the start of the year, which is welcome, but they remain high enough to affect margins on projects across every sector," said Mr Brownlee.

The Construction Industry Federation is holding its annual conference at Croke Park today, where housing minister James Browne will be in attendance. The theme of the conference is  ‘Ready to deliver: Ireland’s decade of construction’ and aims to look at ways to maximise construction output under the National Development Plan over the next 10 years.

CIF chief Mr Brownlee said: “The construction sector enters Q3 2026 with positive momentum, supported by strong export performance and cost inflation that, while still elevated, has moderated from earlier in the year. The clearest constraint on the industry's capacity to deliver is public works participation."