Northern Irish construction firms experienced a sharp dip in the final quarter of 2017, according to the Federation of Master Builders (FMB) Northern Ireland (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:
• In terms of workloads, expected workloads and enquiries, the overall indicator for the performance of Northern Irish construction SMEs dropped by 19 percentage points in Q4 2017 compared with the previous quarter;
• Fewer construction SMEs predict rising workloads in the coming three months, down from 41% in the previous quarter to 38% in Q4 2017;
• 87% of builders believe that material prices will rise in the next six months, up from 82% in the previous quarter;
• More than two thirds (68%) of construction SMEs are struggling to hire bricklayers and 63% are struggling to hire carpenters and joiners;
• Nearly two-thirds (61%) of construction SMEs expect salaries and wages to increase during the next six months.
Gavin McGuire, Director of FMB NI, said: “Despite seeing some green shoots in Northern Ireland over the past couple of years, with a more positive outlook for the construction sector, it is now disappointing to now see a dip among construction SMEs. A range of factors have contributed to these disappointing results, but the finger can largely be pointed at the political stalemate in the Northern Ireland Executive. The Northern Ireland Assembly was dissolved in January 2017, and therefore this month marks a full calendar year of political uncertainty. In such circumstance, it should come as no surprise that the construction sector in NI has started to dip. Political uncertainty goes hand in hand with low levels of consumer confidence and if consumers are less confident, the building industry suffers. Home owners are the lifeblood of the local builder who relies on people commissioning extensions, loft conversions, kitchens and bathrooms.”
McGuire concluded: “Aside from the political situation in Northern Ireland, the planning system can also be in part blamed for the slow levels of growth in construction. The numerous sources of delays and inefficiencies in the planning system impact upon development rates for new homes, and act as a major deterrent to small developers that need to see speedy returns on their investments. Earlier this month, Belfast City Council overhauled its planning system and introduced a new customer charter with ten operating principles to speed up the process. While this is certainly a step in the right direction, all local councils in Northern Ireland ought to look at their current system and speed up the process for applications. Unless our planning departments are reformed and the political stalemate is brought to an end, our fear is that construction growth figures will continue to worsen. I hope that the new Secretary of State for Northern Ireland Karen Bradley will do everything in her power to break the deadlock and facilitate a way forward in Northern Ireland.”