Business

Lack of Stormont government dragging down north's construction sector says survey

THE continued lack of a Stormont government is dragging down the north's construction sector, according to the latest RICS and Tughans Construction and Infrastructure Market Survey.
Gareth McKeown

THE continued lack of a Stormont government is dragging down the north's construction sector, according to a new industry report.

The latest RICS and Tughans Construction and Infrastructure Market Survey, covering the final three months of 2018 shows a fall in activity compared to the previous quarter.

Northern Ireland was the only region in the UK where the balance of surveyors reported an overall decline in activity at the end of the year, albeit marginally so. The north was also the only region where surveyors reported a fall in the number of business enquiries received.

While the amount of private sector housing-building and commercial construction work rose at the end of 2018, slumps in activity were recorded in public housing, public non-housing and infrastructure, with the lack of a devolved government cited as a key factor.

Adding to the gloom the future outlook is no brighter, with local surveyors the least optimistic in the UK about the next 12 months when it comes to employment and future workloads.

More local respondents also expect to see profits decrease in the next 12 months in comparison to their UK counterparts.

RICS Northern Ireland construction spokesman, Jim Sammon admitted the latest figures are concerning.

“The lack of decision-making in government continues to impact on construction activity and on the delivery of important projects. Alongside uncertainty relating to Brexit, surveyors cite this as a major challenge for the market and they anticipate that 2019 to be a challenging year," he said.

Tim Kinney, construction partner at Tughans said the figures highlight a disparity between the private and public sector.

“The two-speed nature of Northern Ireland's construction sector appears to continue, with some private sector activity forging ahead, while surveyors report declines in infrastructure and other publicly-funded workloads."

“Housing-building appears to be particularly strong, alongside private commercial activity. However, it is essential that decisions can be made in relation to major publicly funded projects to ensure that they can proceed and deliver a positive impact for the economy and society," Mr Kinney said.

Martin McAuley, RICS Northern Ireland policy manager called for "political certainty" to help stem the tide.

“Northern Ireland's construction industry continues to face the twin hurdles of an extended political impasse and ongoing uncertainty surrounding Brexit. The fall in public workloads reported by surveyors reflects a continued stasis at Stormont where there appears to be no fresh effort to restore the Executive."

"As investors give further consideration to private projects in the context of Brexit, markets need more political certainty if the outlook is to improve," he added.

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