Business

Lack of Stormont Government 'seriously undermining' local construction industry

Growth among the north's small construction firms dipped over the last quarter according to the latest FMB survey
Gareth McKeown

THE lack of a Stormont Executive is "seriously undermining" the local construction industry and the wider economy according to an industry body chief.

Growth among the north's small construction firms dipped over the last quarter according to a new survey, with the lack of political leadership cited as a key issue of concern by Gavin McGuire, director of the Federation of Master Builders (FMB) NI.

The latest FMB NI State of Trade Survey, covering July through to September shows that activity from construction SMEs rose at a slower pace compared with the previous quarter, with rising prices and a skills shortage cited as key issues for the industry.

It mirrors the picture across the UK, with Wales the only home nation to experience a faster rate of growth over the quarter.

Mr McGuire said that construction firms in the north have an "extra barrier" to contend in comparison to their UK counterparts, namely the Stormont stalemate.

"The ongoing political turmoil in Stormont is seriously undermining our construction industry and the wider economy," he said.

"The longer we lack a Government in Northern Ireland, the more insecure the private sector becomes. Political uncertainty is the enemy of small building firms who rely on the confidence of home owners to commission home improvement projects. Although generally, Northern Ireland construction firms are busy, the long term pipeline is difficult to predict. With Brexit less than a year away, now, more than ever, we need strong and decisive political leadership that can deal with the serious challenges the construction industry faces.”

A total of 86 per cent of builders reported increasing building prices according to the latest survey - an increase on the 76 per cent reported in the previous quarter.

There was also an increase in recruitment difficulties for construction SMEs, with more than two-thirds (68 per cent) now struggling to hire bricklayers and 59 per cent encountering problems recruiting carpenters and joiners.

More than half of small construction firms (58 per cent) surveyed said they expect salaries and wages to increase over the next six months.

Mr McGuire said although the local construction sector remains in positive territory, the warning signs are now there.

"Fewer than one quarter of responses were positive in the third quarter of this year, down from nearly half in the second three months of 2018. This is hardly surprising given the wider context. The construction skills shortage is ever worsening, with the latest results matching the highest levels ever recorded in terms of the proportion of firms struggling to hire key trades like bricklayers. What’s more, costs, including wages, salaries and material costs, are rising steadily meaning these firms’ already razor thin margins are being squeezed even further," he added.

 

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