The war in the Gulf will hit the Irish construction sector and large-scale infrastructure projects because of disruption to a wide range of supply chains, according to a new report.
Arcadis, a global design, engineering, and management consultancy firm, has published its Spring 2026 Ireland Market View Report, which examines macroeconomic trends, sector performance and future projections for the Irish construction market.
On the war in the Gulf, it noted the differences between the parties “appear difficult to reconcile”. Despite the “powerful economic and political forces that favour a deal”, their positions are now “clearly entrenched”, with implications for Irish construction.
Although renewable energy provides a large share of Ireland’s electricity supply, more than 80 per cent of Ireland’s total energy demand is imported, it notes.
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Beyond energy, the Gulf region is a “major producer” of fertiliser, plastics and aluminium, as well as “essential precursors” used in the manufacture of copper and silicon chips.
“As a result, the conflict could disrupt a wide range of supply chains,” it said.
“Under the most optimistic scenarios, it will take three to six months to return to pre-conflict patterns of energy trading due to a combination of security considerations, production restart issues and the repositioning of the merchant fleet.
“Supplies of liquefied natural gas are expected to be disrupted for a longer period, due to extensive damage to Qatar’s Ras Laffan LNG terminal, which could reportedly take years to repair,” it says. “This means product availability and prices will be unpredictable for an extended period.”
The impact of the crisis will be felt in three areas: growth, inflation, and a negative impact on confidence, the report says.
“Furthermore, the ECB might be required to raise borrowing rates across the euro zone,” it said. “Higher inflation and lower investor confidence could potentially result in lower levels of demand leading to a stagflation scenario.”
It said Irish construction will be “further exposed” because of the energy intensity of many materials, including brick, glass and cement. “Large-scale infrastructure projects will also be affected by increased costs of plant and logistics,” it said.
Fuel costs typically equate to 15–20 per cent of the costs of hired, operated mobile plant. “During the early stage of the crisis, the most immediate inflationary impacts are likely to be from haulage surcharges,” the report added.
On the Trump administration’s tariff policy, the report said recent events have “complicated the picture” for 2026. “Changes to US tariff policy following the decision of the US supreme court have reduced certainty for customers and investors while also undermining the value of hard-won trade deals,” it said.
“The recent fluctuations in energy prices following the start of the 2026 Iran war have further destabilised the market.
“Assuming that short-term turbulence can be set aside, Ireland’s economy should enjoy the enviable prospects of high, sustainable growth rates, moderate inflation, and positive earnings growth in 2026.”
On housing, the report said the market has “stabilised”. New starts in December 2025 totalling 3,065 were described as “consistent with an annual output of 36,000 units, a return to more normal levels of production”.
“However, build rates will need to accelerate further during 2026 if ambitious completion targets are to be achieved, averaging 50,000 per annum over the period to 2030,” it added.
Finally, the report turned to the office market, noting prime office development is starting to see lower vacancy rates as “grey space is absorbed”.
“With approximately 50,000 square metres of offices scheduled for completion in 2026, the pipeline of available space is diminishing at last,” it said. “However, construction costs for best-in-class facilities are high and remain a viability barrier.”
