Belfast Telegraph

Stalled public spending amid Stormont stand-off a drag on construction industry

Challenging times: Jim Sammon
Challenging times: Jim Sammon
Ryan McAleer

By Ryan McAleer

A lack of publicly-funded building work is continuing to hurt Northern Ireland's construction industry, a new survey out today has suggested.

The first construction and infrastructure market survey of 2019 from the Royal Institute of Chartered Surveyors (RICS) and Tughans suggests that activity continued to fall in the first quarter, prompting fresh concerns over the impact of the political situation on the economy.

The report is based on a series of set questions posed to industry professionals to gauge attitudes on the state of the construction sector here.

The results showed that the private housing sector remained the standout performer during January and March this year, with the responses suggesting a rise in workloads over the UK average.

But responses to questions relating to public housing, public non-housing and infrastructure work all pointed to declines in activity, along with commercial construction activity.

Northern Ireland was one of two UK regions where respondents reported an overall decline in workloads. Northern Ireland was also the only area to report a fall in business inquiries.

The RICS and Tughans said that the comments in the survey reflected the view that the current political landscape, with a lack of devolved government coupled with Brexit uncertainties, had contributed to a situation where public spending is limited and investors are proceeding with caution.

Sign In

While the 12-month outlook in terms of workload had reflected a slight rise in positivity compared with the end of 2018, the survey showed Northern Ireland as the least optimistic for 12-month forecasts when it came to employment prospects and profit margins.

Jim Sammon, the RICS Northern Ireland construction spokesman, said: "House building remains the positive story, but the local construction sector continues to be faced with an unsettling overall picture, particularly regarding public-funded work.

"Northern Ireland continues to feel the effects of the challenging political circumstances, and while the imminent threat of a no-deal Brexit has clearly receded, investors appear to be continuing to proceed with some caution."

David Jones, head of real estate at Belfast law firm Tughans, said he believed the challenges posed to the retail landscape were reflected in the drop in private commercial activity,

"It is no surprise that the political situation continues to be felt regarding work that is dependent on public funding," he added.

Belfast Telegraph