Housebuilding the bright spot in a lacklustre construction sector

As figures for the last three months of 2017 revealed house-building to be a brightspot the Royal Institute of Chartered Surveyors (RICS) said that was tempered by a fall in private industrial and public non-housing activity.

The latest Northern Ireland construction and infrastructure market survey from the RICS and legal firm Tughans showed private sector and public-sector housing activity increased in the three-month period, according to the net balance of Northern Ireland respondents, while there was also a growth in data regarding both private commercial and infrastructure activity.

However, the drop in private industrial and public non-housing saw the overall workload balance at +6 percent lagging behind all other UK regions.

The outlook for construction and infrastructure activity whilst relatively upbeat, also lags behind other UK regions, the report says, with only Scotland showing lower hopes for jobs growth in the nest 12 months.

The lack of sufficiently skilled workers appears to be an obstacle for many construction businesses here, particularly with regard to professional services such as quantity surveying, demonstrated by a figure that was the second highest recorded for 10 years.

It pointed to anecdotal evidence that the current exchange rate was leading some EU nationals to move elsewhere for work and added that a number of respondents pointed to the lack of a functioning Executive at Stormont as an impediment to investment.

“It would perhaps be fair to say that the construction sector in Northern Ireland is something of a mixed picture,” said RICS NI construction spokesman Jim Sammon.

“As the survey suggests, house-building activity in some areas continued to grow, and we are seeing good activity in areas such as hotel development.

“But there is a divergence between Greater Belfast and some other areas, and a divergence between subsectors. Some improvements in procurement processes are being made but the planning process remains unnecessarily difficult.

“Looking ahead, it is vital that the political situation in Northern Ireland is addressed to boost confidence and to ensure important decisions are being taken. A resolution to some of the key challenges associated with Brexit is also important.”

Tim Kinney, construction partner at Tughans said: “It is encouraging to see even a small upturn in infrastructure workloads, although the overall picture is one of limited growth.

“It is good news that private house-building activity and commercial activity has risen and those responses back up evidence of a spike in local construction recorded in the latest construction bulletin from the Northern Ireland Statistics and Research Agency - although it is coming from a low base.”