Belfast Telegraph

UK construction levels take dip with knock-on effect on Northern Ireland

Trade survey records lowest reading of sector since October last year

By Lesley Houston

The UK construction industry has experienced its lowest level of growth for 13 months, figures which experts say are being reflected in Northern Ireland.

The dip comes as the surge in house building in recent months cooled, acccording to the CIPS/Markit purchasing managers' index survey.

The monitor showed construction levels were at 59.4 - where the 50 figure separates growth from contraction - marking a fall from the previous month's 61.4.

The figure is the lowest reading of the sector since October last year.

Despite the news, it still meant the sector had posted a figure above 50 for 19 months in a row.

In Northern Ireland, the Federation of Master Builders' (FMB) latest State of Trade Survey shows a similar pattern.

The most recent figures for the sector in Northern Ireland showed that, thought it has remained in positive territory for the sixth successive quarter, the rate of growth is slowing.

Louise Ward, services and public affairs executive of FMB Northern Ireland, said that firms in the small and medium construction company bracket have been experiencing slow levels of recovery over the past 18 months.

"Despite this, the wider construction sector is yet to reach pre-recession levels of output," she said. The looming public sector spending cuts are likely to pull the rug from under us before we have managed to regain our footing."

She added: "There is still a growing gap between Northern Ireland and the rest of the UK in terms of construction work, this is leading to a major drain of both people and skills to the mainland UK.

"Given the volume of work coming out in Great Britain and the higher levels of wages it will be extremely difficult for Northern Ireland to regain the skilled workers who, understandably, are going to where the work and the higher wages are."

The UK figures showed that all the main areas of construction activity registered weaker growth in November, led by a marked slowdown in civil engineering.

House-building was the strongest performing area, though its pace of growth slowed for the fourth month in a row to reach its lowest level since October last year.

However, experts have predicted that a growing number of companies providing foreign direct investment and jobs in Northern Ireland will help prompt growth in construction output in the New Year.

A number of reports have suggested that Grade A office supply, particularly in Belfast city centre, has reached critical levels, with much remaining available space being snapped up.



Speaking to the Belfast Telegraph earlier this week, John Armstrong, managing director of the Construction Employers Federation, said that an shortfall of premium office space in the city could spark a new wave of building work. He said that even though construction output in Northern Ireland hit a new low in 2014 there remained a cautious hope that 2015 would bring better times.

"As demand for office space in Belfast increases there is a reasonable expectation this will lead to a number of new office developments," he said.

Belfast Telegraph