Business

North's construction firms bounce back at start of 2018

Northern Ireland construction firms have reported a strong start to 2018, but rising costs remain a concern

NORTHERN Ireland construction firms have reported a bumper start to the year, but costs continue to rise, according to the latest industry survey.

The Federation of Master Builders (FMB) Northern Ireland (NI) State of Trade Survey has revealed strong growth in the local construction sector in the first quarter of 2018.

Overall the north's construction SME's enjoyed a 33 per cent increase in performance in the first three months of 2018 in comparision to the previous quarter, the biggest increase of any UK country. The overall indicator comprises workloads, expected workloads and enquiries.

The survey also shows that more construction SMEs are predicting rising workloads in the coming three months, rising from 38 per cent to 49 per cent over the quarter.

That being said a whopping 90 per cent of builders reported increasing material prices at the start of the year - the highest number on record, while 83 per cent of firms believe prices will increase over the next six months.

Over half of respondents also reported concerns in relation to recruitment with 58 per cent struggling to hire bricklayers and 55 per cent encountering problems taking on carpenters and joiners.

Two thirds of construction SMEs (66 per cent) expect salaries and wages to increase during the next six months, up marginally from 62 per cent in the previous quarter.

Director of FMB NI, Gavin McGuire said the rebound in the north's construction sector is unexpected.

“The first quarter of this year saw Northern Ireland's construction SMEs bounce back from a somewhat less positive position at the end of last year," he said.

"These results are particularly pleasing, and perhaps even surprising, given that firms have had to navigate choppy waters in the first three months of 2018. Builders had to contend with the ‘Beast from the East' which saw some sites close for up to a week at a time. In addition to the cold snap, the cost of doing business for construction SMEs has risen considerably during the first quarter of this year."

"Rising costs can be attributed to the acute skills crisis in construction – more than half of firms are struggling to hire bricklayers and carpenters. If margins continue to be squeezed, firms across Northern Ireland may struggle to make ends meet. These constraints may therefore threaten to stifle the recovery experienced over the past three months," he added.

The Federation of Master Builders (FMB) is the largest trade association in the UK construction industry representing thousands of firms in England, Scotland, Wales and Northern Ireland.

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