Over 35,000 jobs were created in the construction industry over the past year, the latest quarterly report on the industry found.
Employment in the sector has now risen to 235,000 - a dramatic increase of 15 per cent over the past 12 months.
Minister for the Environment Dick Roche said the construction sector now accounts for over 12 per cent of the total number of people employed.
"The construction industry is valued at over €28 billion or 24 per cent of Irish GNP and continues to be a driver of growth in all areas of our economy," Mr Roche said.
The latest report showed a high number of planning permissions had been granted, which could result in more houses being built this year than the 76,900 units constructed in 2004.
The Construction Industry Indicators, produced independently by DKM Economic Consultants, showed house price inflation has moderated.
Investment in building and construction was up 7.7 per cent in 2004 compared with the previous year.