Business

Northern Ireland construction output slumps to 'alarming' levels at start of 2018

Construction output in the north fell by 6.5 per cent at the start of the year in comparison to the end of 2017

CONSTRUCTION output in the north slumped to "alarming" levels at the beginning of 2018, new official figures show.

The latest Northern Ireland Construction Bulletin covering the first three months of the year, shows that output in the sector decreased by 6.5 per cent in comparison to the end of 2017 and was 6.1 per cent lower than the same period last year. The slump follows four quarters in which the level of construction output had been broadly consistent.

The decrease in overall output from the last quarter was accounted for by an 11.8 per cent decrease in repair and maintenance and a 6.7 per cent reduction in new work. Other work (9.1 per cent), infrastructure (7.5 per cent) and housing (3.1 per cent) also recorded decreases in output in comparison to the end of 2017

Construction Employers Federation managing director, John Armstrong described the latest figures as "alarming" and more evidence of the industry suffering from a lack of devolved government.

“The lack of leadership and abdication of responsibility that the past 18 months has seen is now clearly impacting on the levels of public sector work coming to the market as well as the confidence of the private sector with regard to investing in new development," he said.

“Looking purely at the public sector spend, these figures clearly show that, even though Executive Department's capital budgets have been on the rise, the lack of ministerial authority and accountability has left civil servants increasingly unable to progress works. Importantly, this slowdown in activity encompasses not just the large scale flagship projects that get so much attention, but also the smaller to mid-sized education, health and housing works which are the lifeblood of local contractors, their employees and their supply chains."

Robert Gibson, audit and assurance director at Grant Thornton Northern Ireland said it is not all doom and gloom for the local construction industry

"While these figures may provide some cause for concern in the industry, work levels in 2017 were among some of the highest recorded in the past five years. It is also too early to determine whether the decrease is the start of a new trend or merely a short-term setback."

“The data does not include business secured outside Northern Ireland, where many of our clients in the industry continue to carry out significant levels of work," he added.

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