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Survival warning over building firms in Northern Ireland

By Rachel Martin

Published 01/03/2016

Under one-third of Northern Ireland construction firms are predicting growth in 2016
Under one-third of Northern Ireland construction firms are predicting growth in 2016

A quarter of construction firms in Northern Ireland are in "survival mode", the Construction Employers Federation (CEF) has warned.

The CEF said many firms had spent the last three months of 2015 working at below half of their capacity.

Its latest survey shows a worsening situation compared to the final quarter of 2014, when just one in five put survival as their business priority.

Oliver McAllister, PwC director of construction and real estate, said the survey suggests that the recovery in construction may be losing momentum.

"Overall, the UK economy has been recovering well with solid job creation and infrastructure investment increasing in London and Great Britain regions," he said.

"This is not being reflected in Northern Ireland."

The CEF also said the industry had seen a 2% decline in output at the end of last year.

Mr McAllister said: "Anecdotally, there appears to be uncertainty around the availability of commercial finance concerns over the cost and availability of development land and little progress in modernising planning regulations."

CEF managing director John Armstrong described the findings as "a mixed bag".

"This is an industry that generates high wages, significant levels of gross value added and extensive downstream investment and job creation, but it relies on developer confidence and public sector investment," he said.

Under one-third of the firms anticipated growth this year.

Many Northern Ireland building firms have been seeking work in Great Britain, with McAleer and Rushe, O'Hare and McGovern and Graham among those increasing their work across the water.

According to the Royal Institution of Chartered Surveyors (RICS), around half of the work carried out by Northern Ireland construction firms is in Great Britain.

Other issues facing the sector include the prospect of a government-led apprenticeship levy on top of the compulsory levy already applied by Construction Industry Training Board (CITB).

Issues surrounding the procurement process and new devolved planning applications have also placed the industry under strain.

Speaking to the Belfast Telegraph in December, Mr Armstrong said politicians in Northern Ireland now needed to "focus on delivery", and said the industry was "not in the position" for political games.

Belfast Telegraph

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