The Federation of Master Builders

Growth slows as political uncertainty bites

Published date: 24 October 2018

Growth among Northern Ireland’s smaller construction firms dipped in the third quarter of this year, according to the Federation of Master Builders (FMB) NI.

Key results from the FMB’s latest State of Trade Survey, which is the only quarterly assessment of the UK-wide SME construction sector, include:

  • The pace of growth among NI’s construction SMEs slowed in Q3 2018 compared with the previous quarter;
  • Activity rose at a slower pace compared with the previous quarter in England, Scotland and Northern Ireland, with Wales being the only home nation to experience activity increasing at a faster rate;
  • 86% of builders reported increasing material prices in Q3 2018, up from 76% in Q2 2018;
  • More than two-thirds (68%) of construction SMEs are struggling to hire bricklayers and 59% are struggling to hire carpenters and joiners;
  • More than half (58%) of construction SMEs expect salaries and wages to increase over the next six months.

Gavin McGuire, Director of FMB NI, said: “Although we are still in positive territory, this new research undoubtedly carries some warning signs. Fewer than one quarter of responses were positive in the third quarter of this year, down from nearly half in the second three months of 2018. This is hardly surprising given the wider context. The construction skills shortage is ever worsening, with the latest results matching the highest levels ever recorded in terms of the proportion of firms struggling to hire key trades like bricklayers. What’s more, costs, including wages, salaries and material costs, are rising steadily meaning these firms’ already razor thin margins are being squeezed even further.”

McGuire concluded: “In addition to this, NI construction firms have an extra barrier to contend with than their counterparts on the mainland. The ongoing political turmoil in Stormont is seriously undermining our construction industry and the wider economy. The longer we lack a Government in NI, the more insecure the private sector becomes. Political uncertainty is the enemy of small building firms who rely on the confidence of home owners to commission home improvement projects. Although generally, NI construction firms are busy, the long term pipeline is difficult to predict. With Brexit less than a year away, now, more than ever, we need strong and decisive political leadership that can deal with the serious challenges the construction industry faces.”

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