Housebuilding the brightspot in challenged sector
Private sector housebuilding is the only part of the troubled construction sector reported to be in growth in the second quarter (Q2) of the year according to the latest data from the Royal Institution of Chartered Surveyors (RICS).
And that situation seems set to remain as local members become increasingly concerned at the prosepcts of progress without an Executive.
Produced with law firm Tughans, the NI Construction and Infrastructure Market Survey reported overall workloads as broadly flat for the fifth quarter in a row as a net balance of just 2% of respondents said business was up.
That was well below the UK average, with a net balance of +15%, and all other regions.
Infrastructure workloads and public non-housing workloads are also facing serious challenges according to the survey, with a quarter of respondents in both sectors saying workloads had decreased in Q2.
“While it is encouraging that housebuilding is continuing to grow in Northern Ireland the picture presented by the survey is somewhat different across the rest of the industry, and, perhaps unsurprisingly, Northern Ireland surveyors are feeling less optimistic about the outlook than they were,” said RICS NI construction spokesman Jim Sammon.
“Our respondents are telling us very clearly that without a functioning Executive they have serious doubts about the ability of departments to approve strategic planning decisions and future expenditure on major projects.
“This is a situation that needs urgently addressed, particularly in relation to infrastructure activity.”
Looking ahead, the survey said members are still the least optimistic in the UK, with the Northern Ireland outlook flat, with a zero net balance for 12-month expectations, compared with an average net balance of 41% across the rest of the UK.
When it comes to expectations around employment and profit margins for the next year, the local figures are both now in negative territory.
Tim Kinney, Construction Partner, Tughans, said: “Those hoping to see evidence of an increase in office, retail and leisure development or further investment in our infrastructure, won’t find it in the latest survey. A further upturn in housebuilding is certainly to be welcomed but it really is the only brightspot in an otherwise challenging environment which is being exacerbated by the lack of decision-making to push forward key infrastructure projects.