We need to make it easy for international investors
ONE thing is for certain – we live in a global world. In just the past week, a Northern Ireland-based company doing work for global financial institutions announced it is to create over 600 local jobs, and a US insurance tech business opened a very large new office building in Belfast city centre.
These are just two recent examples, but they help illustrate the extent to which our economy is ever-more dependent on globalisation for trade and also in terms of inward investment.
It is increasingly important that we adapt to this environment, making it as easy as possible for local companies to ply their trade overseas and international investors to put their money into Northern Ireland. And we have the opportunity to do just that when it comes to the construction sector.
Until recently, despite rapid globalisation, investment funds flowing across borders, and money being poured into constructed assets, there was no global language and framework to classify construction costs.
But work has been going on at a global collaborative level to address this issue. It has resulted in the creation of the International Construction Measurement Standard (ICMS), which has introduced a standard structure and format to bring greater consistency in classifying and reporting capital costs for construction projects.
Why is this important?
The fact that the reporting and costing methods used in the construction industry have significant variance across markets means that comparing projects around the world is difficult, investment risk is increased, and transparency is impeded.
This causes huge problems for cost consultants, quantity surveyors, construction economists, cost engineers and ultimately investors. Creating a common standard improves transparency, investor confidence and public trust.
Potential benefits of having ICMS include: improved investment and funding decisions; improved cost prediction and management; more consistent accounting; consistent and transparent benchmarking; and improved ability to identify the causes of differences in costs between projects.
From a Northern Ireland perspective, adopting ICMS would make this place more attractive to international investors – providing greater transparency, consistency and certainty for them. And we all know that investors like certainty.
Ultimately, widespread adoption of ICMS in the construction market here could provide Northern Ireland with a competitive advantage and signal to potential investors that this is a market that they should be active in. It would also help ensure government projects are delivered in a consistent way, in line with best practice, helping achieve value for public money.
The need for accurate reporting of costs in construction and infrastructure projects is critical not only in terms of attracting investors but also for assessing the economic viability of projects and maximising their impact. And we know that investing in infrastructure in Northern Ireland is absolutely essential.
ICMS provides global consistency in reporting; the kind of consistency that inward investors increasingly demand, and government projects need.
At present, ICMS is not centrally adopted in Northern Ireland and its usage in the private sector is patchy.
Our message is therefore very clear to the construction sector, government and other stakeholders - widespread adoption of ICMS provides the opportunity for significant competitive advantage. In such a global world, it is essential that we adopt the global standard.
:: Susan Mason is acting director of the Royal Institution of Chartered Surveyors (RICS) in Northern Ireland. RICS is the principal independent body representing professionals employed in the land, property and construction sectors and locally represents over 3,000 cross-sectoral members.