Report shows construction industry collapsed by 30% during pandemic

The report also indicates that, despite the challenges presented by Covid-19 and Brexit, the sector is one of the better performing industries at the moment in Northern Ireland.

The report highlights that construction output fell by 30% during the height of the pandemic in 2020, with hospitality, retail, and commercial construction most affected. The report also suggests the cost of construction increased by 1.5% in 2020 and is anticipated to increase further between 1% and 1.5% in 2021.

However, AECOM predict that once the current pent up demand from the period of lockdown slows, there will be a reduction in the cost of labour and, despite global competition for supplies as a result of the pandemic, the new trade agreement between the UK and EU should help mitigate against any significant cost increases in materials for the industry in Northern Ireland.

Jody Wilkinson, Director AECOM Northern Ireland said: “Throughout the entire pandemic, the construction industry demonstrated both its resilience and resourcefulness. The modest growth figures which have been recorded and the reasonable outlook for 2021, place the construction industry in a favourable position despite the ongoing challenges presented by Covid-19.

“The industry did experience a significant shock in 2020 with a reported collapse of 30% in the height of the pandemic. Hospitality, retail, and commercial development has all but halted in Northern Ireland and, while hospitality and retail should expect a modest recovery in 2021, the future is unclear for commercial construction due to the reduction in demand for office space.

“In October 2020, the construction industry was the strongest part of the economy and the only sector to report growth in output and orders that month. The rebound in activity and quick recovery was undoubtedly due to the government supports available during the pandemic and the continuation of public projects and developments.”

“Although the cost of construction will increase by a further 1% to 1.5% in 2021, we believe Northern Ireland will remain competitive in comparison to other countries as the new trade agreement should provide for cost effective importing and exporting and present Northern Ireland as an attractive place for investment due to its access to both markets. While the current situation with potential tariffs on steel imports is indeed worrying for industry, its impact on output for 2021 will depend on if/when it is enforced and if counter-measures are put in place by the Government. Also, as sustainable building practices continue to expand, this could be the catalyst that shifts demand from steel to more environmentally friendly alternatives such as timber for certain buildings.

“We expect housing to be the key for sustained industry growth in 2021. The persistent demand for housing permeates across both the public and private sector as the population of Northern Ireland continues to grow, with a projected increase of 3.5% by 2033. The introduction of the Belfast 2035 growth plan and the increased focus on sustainable transport models also present real opportunities for the industry this year.”

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

In order for us to continue to provide high quality and trusted local news on this free-to-read site, I am asking you to also please purchase a copy of our newspaper whenever you are able to do so.

Our journalists are highly trained and our content is independently regulated by IPSO to some of the most rigorous standards in the world. But being your eyes and ears comes at a price. So we need your support more than ever to buy our newspapers during this crisis.

With the coronavirus lockdown having a major impact on many of our local valued advertisers - and consequently the advertising that we receive - we are more reliant than ever on you helping us to provide you with news and information by buying a copy of our newspaper when you can safely.

You can also enjoy unlimited access to the best news from across Northern Ireland and the UK by subscribing to newsletter.co.uk

With a digital subscription, you can read more than five articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content. Visit https://www.newsletter.co.uk/subscriptions now to sign up.

Thank you