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Commercial Property

Stormont stalemate hammers Northern Ireland construction sector

Latest RICS survey of construction companies says lack of spend on capital projects as a result of Executive collapse is denting activity

Jim Sammon, RICS NI Construction Spokesman

Northern Ireland’s construction sector has laid the blame for its declining workload at the closed door of Stormont.

The latest industry survey said a lack of capital spend by government as a result of the political standoff and dissolution of the Executive was responsible for the fifth consecutive quarter of contraction in workloads in the three months to the end of June. That jars with the wider 海角视频 picture where workloads are expanding, leaving Northern Ireland as the worst performing region.

The RICS (Royal Institute of Chartered Surveyors) report said all subsectors of the industry had reported a fall in workload, with those relying on publicly funded work noticing a particularly deep slide.

There are, however, chinks of light in the survey with the sharp falls in activity in the private housing construction sector reported in the first quarter abating and signs the industry is less pessimistic for future months.

A marginal net balance of respondents to the survey said they expected workloads to rise in the next 12 months, the first time the figure has been in positive territory for more than one year.

However, profit margins remain under pressure as a result of inflationary pressures on raw materials and labour. The latter is a particular issue with skills shortages across the industry still apparent, although not to such an extreme as in previous surveys.

"The local construction industry continues to face significant challenges in skills shortages, rising costs, and wider economic challenges, all of which are impacting on workloads,” Jim Sammon, RICS NI Construction Spokesman, said. “However, we are now seeing the suggestion that these major challenges are perhaps easing a little and this is being reflected in the 12-month outlook.

“The lack of a functioning NI Executive is the one challenge that isn’t getting better and this is impacting on decision-making and ultimately industry activity. This is weighing on market conditions with public sector projects playing such an important and vital role in the construction industry in NI.