Half of Northern Ireland building firms planning job cuts
Survey warns almost half of companies plan job cuts
Northern Ireland's construction sector may already be in recession, a leading trade body has warned.
The Construction Employers Federation (CEF) represents over 800 companies, accounting for around 70% of construction output in Northern Ireland.
It said that over two and a half years since the collapse of the Northern Ireland Executive, local construction firms have made it very clear that a market recession is likely, if not already happening.
The body sounded the warning after it surveyed 80 construction firms on their performance in the first half of 2019.
It found that 48% of firms questioned planned to make redundancies over the next two months in the run-up to Brexit.
The findings, since the CEF’s last survey in February, showed a more sombre mood in the trade with 60% believing the market will worsen over the next year and 28% of firms having already made redundancies with a further 48% considering making redundancies over the next three months.
CEF managing director John Armstrong said: “This is, unquestionably, the most challenging survey we have conducted of the industry since 2012.”
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Other key findings showed that only 35% of respondents were at full or almost full capacity. This is down from 75% when the survey was last conducted.
Although half of respondents think their workforce will remain the same over the next 12 months, 35% think it will decrease. A jump of 20% since February’s survey.
And as a direct result of the Stormont impasse, 60% of firms have put off growth plans.
Mr Armstrong said Brexit and a lack of an Executive is being felt across the sector.
“As Brexit continues to dominate the agenda, this survey is the reality of over two and a half years since the collapse of the Northern Ireland Executive and additional continued economic uncertainty,” he said.
“The key impact now being seen across the board is on jobs. The industry is reporting alarming increases in redundancies and projected redundancies since our survey was last conducted in February.
“Added to this, there is a systemic sustainability risk which is making more and more firms once again look with concern to their future.
“The restoration of the Executive cannot, alone, solve this crisis, however, it being in place is a crucial enabler to having a sustainable pipeline of work, putting in place multi-year budgets which can provide certainty to the market and dealing with the key infrastructure funding challenges which are continuing to hold otherwise vital development back.”
As well as the threat to jobs and a decreasing confidence in the sector, labour costs and material costs are putting pressure on businesses.
The State of Trade survey also found that 90% of respondents reported a rise in material costs, while 80% said labour costs had risen significantly.
As a result 25% of companies reported to being “in survival mode” — 5% more than the 20% in February.
Meanwhile, 75% believe a withdrawal agreement and transition period is the best move for the construction sector during Brexit.