Belfast Telegraph

Why there is now some reason for optimism in the construction sector

By Trevor Leaker

The construction industry in Northern Ireland finally appears to be getting back on its feet. After years of contraction and some expansion in 2015, the sector enjoyed sustained growth of 4.5% in 2016.

More encouraging still is the prediction of further growth this year, despite the ongoing political and economic uncertainties created by the outcome of last summer's Brexit referendum and the current Northern Ireland Assembly election.

This cautious optimism was a central theme of AECOM's Ireland Annual Review of the Construction Industry, which was launched in Northern Ireland this month and includes the findings of a survey of 4,000 people from across the Northern Ireland and Republic of Ireland construction and property sectors.

Anticipated moderate growth in 2017 appears to be buoyed by new investments from local authorities and the commercial sector in Belfast. While the shortage of commercial accommodation in the city looks likely to worsen in the short-term, the sector's optimism is perhaps a result of the number of schemes currently underway or being mooted.

Councils, landowners and developers are also pushing forward with projects that will come to fruition towards the end of this year or in 2018, and these should help alleviate the shortfall. The range of hotel and student accommodation projects progressing through the planning process is also a promising sign for the sector.

The devolved planning process appears to be making a difference to the speed of decision-making. With planning powers now in the hands of local authorities, programmes of work are progressing swiftly. New investments from Belfast City Council include its £100m-plus leisure transformation programme.

While this increase in construction activity is encouraging, the skills shortage and tender price inflation remain key challenges. Both were identified as the biggest risks facing industry in 2017 by respondents to AECOM's survey. The labour market is showing clear signs of shortages in key trades. Attracting experienced craftsmen and encouraging new people to join the industry must be a priority.

The construction sector is right to be optimistic for 2017 and continues to strengthen against a backdrop of uncertainty. With industry still waiting for details on how the UK plans to leave the EU, the focus must remain on progressing key programmes of work and maximising the benefits of Northern Ireland's unique relationship with both Great Britain and the Republic.

Trevor Leaker is director of architecture and engineering Ireland, AECOM

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