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Brexit’s soaring building costs in Northern Ireland is alarming

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The prices of some construction materials have skyrocketed

The prices of some construction materials have skyrocketed

The prices of some construction materials have skyrocketed

The construction industry is a key indicator of the health of the economy and evidence that the cost of building materials are soaring should set alarm bells ringing.

Some 80% of firms reported that they were seriously impacted by rising material costs and 38% said the hit was critical.

Little wonder that they are fearful of how the issue will develop. The latest Ulster Bank Purchasing Managers Index reported that the price of some materials have risen by and incredible 400% and there are also delays in sourcing materials. Global supply chain issues have been affected by the new Brexit arrangements that came into effect on January 1, forcing construction firms and retailers to raise their prices.

This is a worrying development right across society. House prices inevitably will rise as no company can absorb prices increases on this scale in their materials.

But it is not just the private sector which needs to be concerned. The shortage of social housing and the poor state of a significant percentage of public housing will only add to the crisis which already exists in this sector.

As well, much needed infrastructure projects may have to be put on the long finger due to exorbitant increases in costs as long-standing tenders for work will now be woefully below the new projected cost of the work.

At a time when the government is hoping to begin rebuilding the economy which has been decimated by the coronavirus pandemic, it now appears that one of the building blocks of the recovery is itself in need of resuscitation.

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While the controversy over the NI Protocol and its impact on trade between GB and Northern Ireland continues, it is evident that the wider impact of Brexit is also causing severe problems. These are not localised but a pernicious by-product of the UK cutting itself off from its nearest market and seeking new trading arrangements with the wider world which is also reeling from the pandemic. The timing could not be worse nor the effects more obvious.

To the credit of the NI Executive, the Finance department according to its minister Conor Murphy, has been working closely with the construction industry in an attempt to identify ways of mitigating the current problems.

Proposals are to be brought before the full Executive aimed at finding some solutions. Of particular interest is how the private and public sector can work together to share the risk of price volatility.

Urgent action is required otherwise the road to recovery will be blocked.


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