Northern Ireland construction sector expands but faces private investment downturn
A spike in local construction is a positive step but the sector faces a year of budgetary pressures and a downturn in private sector investment, it has been claimed.
Building output surged by more than 11% in the third quarter of 2017 compared to the same period a year earlier.
Overall, the volume of construction output increased 1.2% between the second and third quarters of last year.
According to the latest construction bulletin from the Northern Ireland Statistics and Research Agency, there continues to be a general upward trend since late 2014.
But Ulster Bank economist Richard Ramsey said that the recovery is coming from a low pre-crash base, and remains well behind a peak of 10 years ago.
The volume reported in the third quarter of 2017 was the highest in five years.
The increase in overall output included an 8% rise in repair and maintenance. But there was a 2.1% decrease in new work. In the third quarter, there was an increase in infrastructure output of 6.1%, and house building of 3.7%.
Some of the major projects under way in Belfast include hotels such as the AC by Marriott at City Quays, the Grand Central, and initial work on the Scottish Mutual building, which will become the new George Best Hotel.
John Armstrong, managing director of the Construction Employers Federation, said the growth tallied with its own findings, but there were major challenges in "maintaining and accelerating" expansion this year.
"The Executive's flagship schemes stand on their very clear economic merits, however a balance must be struck in budgetary planning between how much resource is spent on these and other areas," he said.
"Additionally, the downturn in private sector investment has, of late, become a renewed and unwelcome factor.
"With Brexit uncertainty affecting institutional investment in Britain, private sector investment in Northern Ireland struggling to maintain its 2015-2017 boost, and local contractors beginning to question how easy it will be to access the Republic of Ireland market post-March 2019, it is almost certain that contractors will, over the coming period, become more dependent on the public purse again."
And Neal Taylor of Grant Thornton said: "The latest Northern Ireland Construction Bulletin will provide welcome reading for those in the industry, showing that the volume of work carried out in the third quarter of 2017 was at the highest level recorded for five years."