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New homes fuelling growth in Northern Ireland but construction now needs infrastructure work: RICS

By Margaret Canning

Published 20/10/2016

Construction work for firms here rose in the third quarter, but at a slightly slower rate than in the second quarter
Construction work for firms here rose in the third quarter, but at a slightly slower rate than in the second quarter

Housebuilding is powering growth in activity in construction in Northern Ireland despite general uncertainty in the economy, according to a major survey.

The Royal Institution of Chartered Surveyors (RICS) today said workloads for building companies here increased in the third quarter, though at a slightly slower rate than in the second quarter.

But firms in Northern Ireland were still heavily dependent on contracts in Great Britain - continuing a trend of seeking work across the water which began when the home building market crashed around 2008.

The RICS construction market survey, carried out with law firm Tughans, also found private housebuilding was surging forward, while private commercial activity showed "relatively robust" growth.

However, infrastructure showed only anaemic growth, and activity in the sector has been much lower than in the UK as a whole, RICS said.

And there was a further blow for infrastructure yesterday when it was confirmed the £100m York Street Interchange was on hold following the vote to leave the EU.

RICS Northern Ireland spokesman, Jim Sammon, explained: "The picture painted by the quarter three survey is one of growth, and expectations have improved following the immediate shock of the vote to leave the EU.

"However, Northern Ireland's construction sector remains heavily dependent on work in Great Britain, and the survey tells us, crucially, that infrastructure activity remains very subdued.

"There is also anecdotal evidence from respondents suggesting that uncertainty still remains on the outlook for the year ahead."

And he said long-term growth depended on infrastructure investment from both the private and public sector - which was also a must for helping to attract foreign direct investment.

Tughans construction partner, Michael McCord, commented: "Activity inside Northern Ireland itself may remain subdued, other than an uptick in residential development, but the local sector continues to find work outside of Northern Ireland, demonstrating the quality of the work our local professionals deliver."

"Clearly some uncertainty lies ahead but, on the positive side, the weakening of sterling could help increase the competitiveness of Northern Ireland companies working south of the border," Mr McCord continued.

Separate market surveys have shown growth in new house building in Northern Ireland, with the National House Building Council reporting there was a 30% increase in new home registrations here during 2015.

But losses suffered during last year by key construction firms O'Hare and McGovern and McLaughlin & Harvey - of £3.7m and £5m respectively - reflect other challenges within the industry, with the former citing "supply chain challenges" in its accounts.

Belfast Telegraph

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