ACTIVITY in the north’s construction sector remained subdued in the first three months of this year as the sector faces into a continuing challenging economic environment, with an uncertainty about budgets and a stalled pipeline of public sector work.
The latest Royal Institution of Chartered Surveyors (Rics) construction monitor also points to workloads being stuck in negative territory for the fourth consecutive quarter across all sub-sectors (public housing, private housing, private commercial, and infrastructure).
And the forward-looking picture remains equally bleak, with Northern Ireland respondents to the survey being much less optimistic than their counterparts elsewhere in the UK, expecting workloads to decline over the next year.
A skills deficit continues to be a key challenge despite the falling activity, with 64 per cent of respondents reporting a shortage of quantity surveyors and 50 per cent saying they were unable to recruit bricklayers.
With rising material and labour costs, profit margins have also been squeezed and are expected to remain negative.
Jim Sammon, regional construction spokesman for Rics, said: “The industry continues to face significant challenges with cost increases and declines in workloads, and continued skills shortages.
“We can see that surveyors in Northern Ireland aren’t as optimistic as can be seen in other parts of the UK. Northern Ireland hasn’t had a functioning government which makes things more challenging for the construction sector.
“Public sector work is a huge part of construction activity here, and without an Executive, there is a lack of certainty about budgets and the pipeline of work. We are calling for a working Executive to ensure that necessary investment in the economy and our infrastructure can be delivered efficiently and in a timely way.”
Simon Rubinsohn, chief economist at Rics, said: “The negative mood around development has eased somewhat in recent months with the workload trend stabilising away from infrastructure where the trend remains more positive.
“A key challenge for the sector continues to revolve around labour shortages in general and skills in particular. Unless addressed, this could prove to be a significant drag on the ambitions of the construction industry.
“Unsurprisingly, credit conditions remain restrictive for now but there is a sense that they could ease as the year wears on.
“Whether this improvement materialises remains to be seen in the face of the ongoing banking stress in the US and how this plays out around the globe.”
