Business

Too early to herald a construction boom despite upturn

Construction output rose 14 per cent in the past year 
Construction output rose 14 per cent in the past year  (Jonathan Brady/PA)

A LEADING economist has said it is "too early" to hail the resurgence of the north's building sector.

Dr Esmond Birnie of PwC was commenting after the latest Northern Ireland Construction Bulletin recorded a jump in output of almost 14 per cent over the past year.

Dr Birnie said the findings were "to be welcomed" but said they didn't tally with other surveys on the state of the industry.

The latest data from the Northern Ireland Statistics and Research Agency (Nisra) showed workloads increased 6.5 per cent in the first quarter of 2015 and was the highest for three years.

While some of the north's top building firms have remained prosperous by looking to Britain and beyond for work, the statistics relate only to jobs carried out in Northern Ireland.

Output was up 13.8 per cent up on the first quarter of 2014.

The results compare favourably with Britain where construction output fell slightly by 0.2 per cent.

New work increased 6.5 per cent during the first quarter while repair and maintenance rose 6.7 per cent.

Significantly, there was a sharp increase of 18.7 per cent in so-called 'other work' which includes the construction of office blocks, hotels and other non-housing stock.

It was accompanied by a 9.6 per cent rise in infrastructure output. Housing output however, decreased by 4.6 per cent.

Nisra said the statistics showed the level of construction output in the north was during the quarter 99.8 per cent its average in 2011. The sector in Britain is at 103.2 per cent of its 2011 average.

Dr Birnie however said the data was not accompanied by a similar increase in construction jobs.

Meanwhile, the latest Purchasing Managers' Index from Ulster Bank and Markit recorded a decline at construction firms.

"The statistics are are very good and that's to be welcomed especially in the light of the extremely deep downturn which the sector experienced that lasted really into last year," he said.

"However, I think we need to wait and see if this is a long term trend.

"There a number of caveats as these figures are provisional and could change.

"They also only relate to work that was actually carried out within Northern Ireland.

"A lot of Northern Ireland-based companies found during the downturn, a lot of work in the rest of the UK, particularly south-east England."