Constructive words from finance minister to help build recovery
FINANCE Minister Conor Murphy wrote in these pages last week that the construction industry is key to the economic recovery. He said that he had therefore asked Executive colleagues to bring forward their capital plans for the year so that a strong pipeline of projects is ready to restart the construction industry.
These are very welcome words and follow calls from Rics for the Executive to bring forward departmental capital programmes urgently and consider implementing the new cabinet office procurement guidance to accelerate projects into the Northern Ireland market.
No one can be in any doubt about the impact of Covid-19 on our construction sector. Nor about how important it is to ensure our construction sector can play its part in the recovery.
Rics surveyed members across the UK on the impact of Covid-19 on the property and construction market.
Professionals reported a decline in business with 80 per cent seeing a decreased workload and 67 per cent seeing a decrease in new business enquiries. Reduced cash flow is being experienced by 69 per cent and just under half of the profession, 49 per cent is now working from home rather than on site or an office location.
Just over half had been furloughed in April with 51 per cent not currently working and a further 5 per cent made redundant. Only 1.1 per cent of the profession had experienced no impact of Covid.
Projects have understandably been much affected with 69 per cent reporting project delays. Rics professionals have seen 47 per cent of construction sites close and 29 per cent of projects cancelled. There have been challenges around the valuation of projects with 29 per cent unable to provide a property valuation.
Additional challenges have been experienced with clients requesting or declining site visits against the policy of the contractor. Some project work has supported infrastructure development due to the pandemic, with 2.4 per cent of Rics professionals directly involved in NHS projects.
So bringing forward capital plans for the year in Northern Ireland would be very welcome. It's imperative that as much activity as possible across the built environment can safely take place to ensure continuity of activity now and post-pandemic.
We also urge the Executive to consider opportunities within the immediate period and vacant public estate to lead an initiative to encourage a large-scale public sector programme of maintenance.
The current lockdown situation means that many publicly owned buildings, such as schools, colleges, museums and libraries that are usually populated are vacant, and this provides an opportunity for condition inspections and maintenance works to be undertaken (within clarified health and safety parameters) that will assist cashflow for SMEs, supporting the supply chain and retaining skills.
Many public workspaces will also require alterations to accommodate social distancing measures in any case and this could be combined with a fast-tracked essential and preventative maintenance programme.
Due to Covid-19, we all find ourselves in exceptional circumstances. But if the Executive acts to bring forward capital plans as the minister has asked, and acts on our other recommendations, there is the potential to mitigate what would otherwise be a very significant, long-term impact on the construction sector and the local economy and help contribute positively to the economic recovery.
:: Brian Henning is regional chair of the Royal Institution of Chartered Surveyors (Rics) in Northern Ireland