A FIFTH of Northern Ireland’s construction companies are operating at less than half capacity, with demand in Britain and the Republic of Ireland dropping.
And uncertainty over the upcoming EU referendum outcome may be impacting on industry confidence according to the latest state of trade survey from the Construction Employers Federation (CEF) and PwC, with 80 per cent of Federation members wanting the UK to remain.
The latest CEF assessment for the first three months of 2016 shows that close to a quarter (22 per cent) of companies were operating in survival mode, while the percentage of companies confident of growth and profitability fell from 50 per cent to 48 per cent when compared against the same period in 2015.
The proportion of firms reporting that their current workload had increased rose to 33 per cent from 27.5 per cent 2015 but remained well below on the first three months of 2014 when half of companies surveyed reported increased demand and workload.
In the first quarter of 2014, nearly a quarter of CEF members’ work done was in construction activity outside Northern Ireland (almost entirely Britain and RoI). That fell to 17 per cent in 2015 and then again in Q1 2016, when only 13 per cent of work was in those markets.
CEF managing director John Armstrong says the industry is not showing any real signs of sustainable recovery, adding: “This is another survey which suggests construction is not sharing in Northern Ireland’s modest economic recovery, let alone the significant growth that is being exhibited elsewhere in the UK and Ireland.
“The proportion of companies in survival mode is up, those anticipating growth and profitability are down and the percentage of work in Great Britain and Ireland has fallen.
“This picture is reinforced by official data from NISRA’s Construction Bulletin, which reported falling output in the latter half of 2015.
“We are operating in an environment where growth in housebuilding is broadly flat and where output in infrastructure and roads has actually declined.
“The one glimmer of light is that over a third of our members say they expect things to get better – I sincerely hope they are right."
Mr Armstrong urged the new Executive to "look at their infrastructure opportunities and priorities - and then act".
He said: "There is an opportunity to give confidence to developers, and incentives to the industry, which combined, will accelerate growth into the economy.”
While the CEF has itself not taken a position on referendum debate, Mr Armstrong it is clear that the overwhelming majority of members are "concerned at the implications for the UK leaving the EU”.
