Public spending cuts hit construction

Policitians must work to make the best of scarce resources  the survey says
Policitians must work to make the best of scarce resources the survey says

The end of 2014 saw a slowdown in the already sluggish construction sector as infrastructure activity “went into reverse”, according to the latest RICS and Tughans construction market survey.

Northern Ireland was the only UK region where surveyors reported a decline in infrastructure workloads; the building of public facilities such as schools, hospitals and roads, citing the impasse over the NI Executive’s Budget as one of the reasons.

But, while the headline figure slowed, it was still positive, falling from +34 in the third quarter of the year to +13 in Q4.

“The activity being undertaken by local firms has risen for the fifth quarter in a row, but at a lower rate due to the fact that infrastructure workloads are now falling,” said RICS Northern Ireland director, Ben Collins.

“The reality is that the growth is coming from work they are doing outside of Northern Ireland, notably GB, where a number of local firms have been increasingly focused. Activity within Northern Ireland itself remains depressed, and the decline in infrastructure activity will only widen this gap between the local and GB markets.”

While the finite and increasingly scarce nature of public cash was understood, he encouraged politicians to recognise the “paramount importance” of investing in infrastructure and to prioritise funding capital expenditure where possible.

“As we have said before, there are alternative methods of finance that should be considered. Research supports Public Private Partnerships (PPPs) for instance as an additional viable solution,” he said.

Michael McCord, construction partner at Tughans Solicitors, said optimism over the buoyant GB market was growing.

“However, the picture within Northern Ireland itself is somewhat more subdued, with public spending constraints a concern and likely to impact further on infrastructure workloads here.”

Despite the slowdown in growth, skills shortages remain an issue for the local construction sector, with local surveyors reporting evidence of shortages of quantity surveyors, other construction professionals, and other construction workers.