More construction projects ground to halt amid supply chain weaknesses

Hundreds more construction projects ground to a halt in the north in the second quarter
Gary McDonald Business Editor

HUNDREDS more construction projects ground to a halt or operated at a much-reduced capacity in Northern Ireland during the April-June quarter, the latest Rics/Tughans market survey shows.

Workloads declined across all sectors including public housing, private housing, private commercial, private industrial, infrastructure, and other public works.

And one of the key issues thrown up in this quarterly bulletin is difficulties contractors have had in acquiring materials through their normal supply pipelines.

It suggests that a lack of transparency across supply chains means clients cannot be sure of the financial viability of the companies their projects are reliant upon.

The survey showed that three in five Northern Ireland respondents reported a decline in headline workloads over the quarter.

There was also anecdotal evidence to suggest spending by the Stormont Executive on capital projects has been in decline. There was also a dip in infrastructure workloads, with 21 per cent reporting a fall over the period.

It's unlikely to improve much going forward, with 41 per cent expecting workloads to decline over the next year, while hiring intentions and profit margins are also likely to be significantly lower, the surveyors say.

More than a third (36 per cent) of Northern Ireland surveyors quizzed for the study say they are seeing shortages of construction professionals, partly due to the high proportion of the workers on furlough.

Rics' regional construction spokesman Jim Sammon said: “While a weak Q2 survey was expected given the impact of the pandemic on the construction sector, the fact that forward-looking indicators are also lower in Northern Ireland than elsewhere in the UK is a greater concern.”

This was reiterated by Michael McCord, senior partner at Tughans, who added: “While the economic uncertainty resulting from Covid-19 have been the driving factor for in construction, Brexit is also a real challenge for Northern Ireland companies.

“Government has provided considerable support to businesses and the economy since March, but many, not least in Northern Ireland, will be looking to the Chancellor for further stimulus in the autumn.”

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