NI construction firms becoming more dependent on GB work

The political impasse is holding back construction activity locally, and firms are becoming more dependent on work outside Northern Ireland, according to the latest RICS and Tughans Construction Market Survey.

Around 42 percent of local companies’ workloads are currently outside Northern Ireland, according to respondents to the survey, and this is expected to increase in the final quarter of the year.

Respondents say that a lack of clarity around public spending, combined with political uncertainty, is impacting activity and driving the need to grow work elsewhere.

Overall, workloads of Northern Ireland construction surveyors increased in the third quarter of the year, for the ninth quarter in succession, however infrastructure workloads were flat and public non-housing workloads fell significantly.

RICS Northern Ireland spokesman, Jim Sammon, says: “The latest survey underlines that local firms in the construction sector are becoming more and more dependent on work outside of Northern Ireland, particularly in GB. This is because they are seeing no real recovery in activity within Northern Ireland, particularly now that they see the political environment impacting further on infrastructure spending.”

“Investing in infrastructure is a crucial part of rebalancing and growing the economy. We need better roads and railways, schools, hospitals, and energy infrastructure to meet our sustainable energy needs. A lot of our existing infrastructure is aging and in need of replacement, and we would strongly encourage the policy makers to take a strategic view in relation to where best public money should be spent to make the most positive impact for the economy and society.”

“Government also has an important role to play in creating the right conditions for private sector investment. Research supports Public Private Partnerships (PPPs) as an additional viable solution to the current infrastructure investment deficit. The PPP model has been increasingly advocated in response to the infrastructure investment challenge since the global financial crisis. We would also like the politicians to set a date and rate in relation to the reduction of corporation tax as soon as possible,” he adds.

Michael McCord, Construction Partner, Tughans Solicitors, says: “Northern Ireland construction businesses clearly remain very dependent on the GB market for work, whilst activity within Northern Ireland itself continues to lag other parts of the UK. This is a challenge for the sector, but it also demonstrates the quality and high standards of our construction firms who are clearly able to compete for and win work in external markets against significant competition.”

The overall workload balance for Northern Ireland in the latest survey was +10. Whilst positive, this was down from +22 in the last quarter.
In relation to work outside of Northern Ireland, the average respondent is doing around 42% of their work outside of NI. A net balance of 44% of contributors expect their workloads outside NI to rise over the coming quarter.