THE north's construction sector is making an impassioned plea to the stalled Stormont Executive to “get us working again”.
The industry is currently facing the dual headwinds of a limited pipeline and stubborn inflation, according to the latest annual sectoral barometer from the Construction employers' Federation (CEF).
“Unquestionably, there are opportunities – from the City Deals to the Shared Island funds to the prospects for major reform of the governance and financing of NI Water and the Housing Executive,” CEF managing director Mark Spence says.
“But the true realisation of these can only come with a restored and fully functioning NI Executive and Assembly which can chart a forward path of public investment in which all can have confidence.
“Indeed for the first time in as long as anyone in the sector can remember, many government clients entered this financial year with no discretionary expenditure – leading to the cancellation of huge swathes of tendering activity.”
He added: “Our survey again reflects what the Executive and the construction sector can achieve when they work together.
“Over a two-year period since the introduction of the Procurement Material Cost Assistance measure which CEF negotiated with the Department of Finance to mitigate against the difficulties of material shortages and cost increases, our members have reported an at least £38 million benefit to the public sector projects they have been working on.
“This has ensured project and contractor viability across huge swathes of government activity and has only been achieved where our members and their clients have worked together in the spirit of openness and transparency.
“Our members recognise the stark challenges we face on matters such as carbon reduction, growing the number of new build homes and building high quality education and health assets for our population.
“But to achieve this we need an Executive in place to maximise the opportunities that much needed investment can bring to not just our community but also the firms, their employees and supply chains which are in dire need of a confidence boost.”
The CEF survey - which collected data from Northern Ireland-headquartered firms with a collective annual turnover of £2 billion - coincides with a report from professional services firm Turner & Townsend which shows that the rate of construction cost inflation in Belfast hit 11 per cent last year, outstripping most other UK cities.
Indeed with inflationary issues showing no sign of abating, 55 per cent of respondents said this was having a "serious impact", causing financial concern or a critical impact leading to contractual or business risk.
Among main findings in the survey were:
? While over half of respondents said their turnover had increased by at least 10 per cent this year, 45 per cent said that their profit margins had worsened, and just 9 per cent said profit margins were better this year compared to last;
? Over the last year, some 70 per cent of firms were operating at full or almost full capacity;
? Main issues identified for most firms were specific skills shortages in construction trades, visibility of pipeline and market confidence to recruit new workers, and the perception of construction as an attractive career path;
? Materials shortages are largely resolved (85 per cent said any issues were now manageable).
