5 Trends to Watch in 2023


Ireland was the fastest growing economy in Europe in 2022 with double digit GDP growth of 10.0%, according to the latest EU economic and finance forecast. While according to recent reports published by the ESRI,  MDD (Modified Domestic Demand), a more accurate indicator of economic activity, grew by a healthy but more moderate, 8.4% in 2022. The construction industry recovered from a couple of difficult ‘COVID-lockdown’ years and recorded an overall value in the region of €30bn, with further growth to come in 2023.

And as we look ahead to 2023, we analysed the challenges, trends and opportunities we might face. Here are 5 things we learned.

1. Inflation & Rising Costs

Driven by the war in Ukraine and rising energy and transport costs, inflation was something we all had to deal with in 2022. Recent CSO figures show inflation continued to rise throughout the year in Ireland and peaked in November at 8.9% (10.1% was the EU average), while easing to 8.2% in December (9.2% was the EU average). It has been a challenge including measures to offset shifting costs between the time a project is tendered and awarded. Signs are inflation is slowing but rising costs is still something we will need to watch in 2023.

2. Skilled Labour Shortage

Ireland’s unemployment rate is currently at around 4%, with 2.55m people working in the country, which is the highest number ever recorded in the history of the state. This is a great statistic to be able to quote. However, the challenge of managing growth in a (close to) full employment environment is most definitely a challenge. This seems to be particularly challenging in the construction industry, where many companies report finding good people to fill vacant roles is not an easy task. This will likely continue in 2023, which will leave many companies stretched to complete workloads with current staffing levels.

3. Office Development & The Rise of the Remote Worker

The COVID pandemic was certainly a catalyst for change and not all of that change was temporary. Many of the office workers that moved to working from home have stayed there. In this regard, the pandemic seemed to have prompted a movement. And the question is, will this movement towards working-from-home affect investment in future office developments? Time will tell.

We believe we have seen a shift in the quality of office fit-outs, where business occupiers are not just looking to fulfil their ESG requirements, but also trying to create exceptional work-spaces, perhaps in an effort to give a reason for employees to go back to the office. 

For the moment though, the office development market is still quite active. According to a recent report by estate agents Lisney, the total level of completed office space in 2022 was 196,500 square metres with more than 80% of this construction activity recorded in Dublin City Centre. There were c.340,300 square metres of office space under construction at the end of September 2022, 40% of which was pre-let or reserved. Another interesting point to note is offices are getting bigger, with the average size of buildings under construction at 13,800 square metres, compared with 4,600 square metres between 2005 and 2007.

4. Data Centres

Data centres have become the linchpin of modern living. And considering that how we live and conduct business is becoming ever more connected, the need to build more data centres will continue. Many Irish contractors have become very active in the European data centre market. At home, investment in data centre projects continues, with Dublin now seen as one the top four data centre markets in Europe.  A CIS Ireland report at the beginning of 2022 showed 31 active data centre projects, primarily in the Dublin area, representing a shell and core value of €1.797bn and covering projects totalling 1.54m square metres of floor area. The challenge will continue to be how to get these power-hungry mission critical environments to operate more sustainably, particularly given recent soundings of possible power shortages.

5. An Increase in Offsite Construction/Manufacturing

Given what could be referred to as a perfect storm (rising costs, increasing labour-shortages, a national housing crisis, a drive for higher levels of sustainability and a demand for higher output volumes), the construction industry simply must adopt more innovative and modern methods of construction if they are to meet the challenges. Companies that continue to work to outdated processes will struggle.

One seemingly obvious solution is to increase our use of offsite construction and manufacturing methods. OSM (offsite manufacturing) is faster and puts less burden on onsite labour resources. It also results in a higher quality fit-out as much of the build takes place in a controlled factory environment. The use of OSM is rising globally and this trend will continue in 2023.


Lisney Research & Reports: Irish Property Market- Office Reports Q3 2022 (2022) Lisney. Lisney. Available at: https://lisney.com/research-and-report/ (Accessed: January 9, 2023).

Economic Forecast for Ireland (2022) Economy and Finance. Available at: https://economy-finance.ec.europa.eu/economic-surveillance-eu-economies/ireland/economic-forecast-ireland_en#:~:text=Ireland%27s%20real%20GDP%20grew%20robustly,investment%2C%20and%20strong%20net%20exports. (Accessed: January 10, 2023).

Recession risks amongst Ireland’s main trading partners, persistent cost-of-living pressures and interest rate increases to reduce Irish economic growth (2022) ESRI. ESRI. Available at: https://www.esri.ie/news/recession-risks-amongst-irelands-main-trading-partners-persistent-cost-of-living-pressures-and#:~:text=The%20Irish%20economy%20displayed%20a,strong%20investment%20and%20consumption%20growth. (Accessed: January 10, 2023).

Consumer price index November 2022 – CSO – central statistics office (2022) CSO. CSO. Available at: https://www.cso.ie/en/releasesandpublications/ep/p-cpi/consumerpriceindexnovember2022/#:~:text=Prices%20on%20average%2C%20as%20measured,and%20Transport%20(%2B7.9%25). (Accessed: January 10, 2023).

Ireland construction market size, trends and forecasts by sector – commercial, industrial, infrastructure, energy and utilities, institutional and residential market analysis, 2022-2026 (2022) Market Research Reports & Consulting | GlobalData UK Ltd. Global Data. Available at: https://www.globaldata.com/store/report/ireland-construction-market-analysis/#:~:text=Ireland%20Construction%20Market%20Size%2C%20Trends%20and%20Forecasts%20by%20Sector%20%E2%80%93%20Commercial,Residential%20Market%20Analysis%2C%202022%2D2026&text=The%20Ireland%20construction%20market%20size%20was%20%2431.8%20billion%20in%202021. (Accessed: January 10, 2023).

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