Business

Challenging environment weighs heavily on construction sector

Activity in Northern Ireland’s construction sector continued to fall at the end of last year according to Rics/Tughans
Activity in Northern Ireland’s construction sector continued to fall at the end of last year according to Rics/Tughans

ACTIVITY in the north’s construction sector fell again at the end of last year as financial constraints and a challenging economic environment continued to impact the sector.

Workloads from October to December remained in negative territory for the third consecutive quarter, with 24 per cent of respondents reporting a fall in workloads (albeit down from 29 per cent in the third quarter), according to the latest construction monitor from Rics/Tughans.

And respondents in Northern Ireland are much less optimistic than counterparts in Britain, with a third expecting workloads to decline over the next year (the figure for the UK as a whole is just 3 per cent).

All sub-sectors experienced a decline in workloads other than infrastructure, where the levels were flat.

Activity in public house-building (down 25 per cent) and private commercial (down 21 per cent) remained negative while private housing activity fell from minus-22 per cent to minus-26 per cent between Q3 and Q4.

There remains a skills shortage across the industry, but it was less pronounced than in previously quarters, and with rising material and labour costs, profit margins have been squeezed and are expected to remain negative, the survey found.

Rics' regional construction spokesman Jim Sammon said: “2022 was certainly turbulent for the construction industry here, with cost increases and declines in workloads, mixed with the challenge of a lack of government.

“The tone of the industry in Northern Ireland isn’t as upbeat as can be seen in other parts of the UK. The disparity between here and the rest of the UK appears to be linked in part to infrastructure workloads. Big infrastructure projects are driving industry growth in GB, while Northern Ireland respondents are actually reporting less activity in infrastructure.

“Both infrastructure work, and public sector projects, are a huge part of the construction industry, and help support our local economy. We are urging the Executive to ensure that necessary investment in the economy and our infrastructure can be delivered efficiently and in a timely way.”