Rising costs leave 27% of NI construction firms ‘critical’

The figures come from the Construction Employers Federation (CEF) in their Manifesto for the 2022 NI Assembly Election, which also includes the results of its State of Trade Survey for the second half of 2021.

The survey, which represents responses from companies with a combined turnover of over £1 billion per annum, had the following key findings.

On rising costs it found:

• 27% said the impact was critical leading to a risk to their business;

• 46% said it was having a serious impact causing financial concern;

On material shortages it found that;-

• 11% said it was having a critical impact on the sustainability of their business;

• 47% said it was having a serious impact causing delays in project delivery/commencement.

CEF Managing Director Mark Spence said: “These results continue to reflect a period of immense challenge for many of our local construction firms. Concerningly, the findings and wider market forecasts detail the clear view that this unprecedented period shows little sign of abating.

“While the Northern Ireland Executive has taken positive steps to help those contractors that are engaged on public works, much of this has yet to translate into actual financial assistance.”

The CEF is asking the Executive to provide; Greater consistency in procurement practice across the public sector; A multi-year capital budget for key projects; An independent Infrastructure Commission; A new Planning Act to speed up decision making processes; At least 9,500 new homes for each of the next 15 years; Measures to support the drive to net zero, including a funded housing retrofit strategy.

In October Stormont announced it is to give housing associations up to £15m to deal with the soaring costs of building materials.

In August the cost of imported plywood was estimated to be 78% higher than the same point the year before, with similar increases in fabricated structural steel and imported sawn wood. In August, Finance Minister Conor Murphy relaxed procurement rules to allow builders to increase the prices of previously agreed public sector contracts.

The Financial Times reports that hundreds of UK construction businesses are collapsing every month due to rising costs and a post-Brexit labour shortage.

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