Northern Ireland's construction sector contracts again amid rising costs and skills shortages
LABOUR shortages and soaring material costs are having a devastating inpact on the north's construction sector, where workloads capitulated in the final three months of last year, a new industry barometer shows.
And surveyors who responded to the latest Rics/Tughans NI Construction and Infrastructure Monitor are far less optimistic about the outlook than their counterparts in Britain.
Construction activity in Northern Ireland fell for the second consecutive quarter, in contrast to all other UK regions, where a sizeable increase in workloads was recorded.
Public housing was the only sub-sector in Northern Ireland where a rise was reported, with other sub-sectors such as infrastructure and private commercial experiencing declines.
Ironically it comes as scores of local construction companies, particularly the larger ones, have successfully turned their focus to winning work in Britain.
Indeed that market now accounts for well over £1 billion of turnover generated by Northern Irish building firms.
At home, acute labour shortages and rising material costs are factors cited by surveyors as impacting on activity, while respondents also expect profit margins to be squeezed in the next 12 months.
Three quarters (76 per cent) are experiencing shortages of quantity surveyors while 71 per cent said they can't get bricklayers.
And just 6 per cent of Northern Ireland surveyors expect workloads to be higher in a year’s time compared to a UK average of 45 per cent.
Jim Sammon, Rics' NI construction spokesman, said: “There is clearly a less upbeat tone to the feedback from Northern Ireland than elsewhere in the UK.
“The concerns around labour and in particular, skilled labour, are just not going away, and appear to be even more acute here than elsewhere. It is very concerning that local surveyors are less upbeat about the year ahead than their counterparts elsewhere in the UK.
“The reality is that with the new-found ability to work from home, many construction professionals can find better paying jobs outside Northern Ireland while living in the low cost of living environment here. This is a new and challenging development for the sector.
“The long-term fix is to the skills challenge is to attract more younger people to the sector but that may be insufficient to address the immediate problem which significantly, is being reflected in expectations for a sharp uplift in wage costs over the next year.
“There is also a need for government to support the sector through, for instance greater consistency in procurement and other measures.”
Michael McCord, senior partner at Tughans, said: “The conditions faced by the construction sector make it a hugely challenging environment, with material shortages, rising costs and skills shortages impacting Northern Ireland severely.
“It is very concerning that local surveyors, unlike their counterparts elsewhere in the UK, expect workloads to stagnate over the next year and profit margins to be eroded. The latest political instability only adds further uncertainty for the sector at a difficult time.”