Skills shortages undermining construction growth
Debilitating skills shortages in the construction sector and a limited supply of Grade A office space are amongst the local economy’s key current challenges, according to the Northern Ireland chairman of RICS. Paul Kendrick says that flat-lining infrastructure workloads are also a major concern.
In his Annual Report, Mr Kendrick says that areas of focus for government and industry should include: encouraging more women into the local construction sector, increasing capital spending, and encouraging the development of more prime office space.
RICS, which has a remit to act in the public interest through its Royal Charter, has members across the land, property and construction industries in Northern Ireland. They include the chief executives of housing associations, leading academics, business leaders, senior public servants, and a range of other practitioners.
Mr Kendrick says: “There have been an impressive number of investment and new job announcements in recent years, including by large international companies. But we currently have a situation where there is not a lot of Grade A office space available here, and a limited pipe-line. If we don’t have the kind of office space that major investors require, the reality is that in future they will go elsewhere. Increasing the supply of prime office space in Belfast needs to be private sector-led, but government can help create an enabling environment; for instance fast-tracking planning applications for strategically important office development. Looking to the model in Cardiff where they have designated 140 acres of prime city centre land as an Enterprise Zone to encourage Grade A office development could be an option.”
“Increased infrastructure spending is also essential for the economy. The public finances are under severe pressure, but we cannot afford not to invest in our infrastructure. Doing so would not only increase Northern Ireland’s competitiveness long-term, it also offers the prospect of an immediate economic boost through the construction activity that would result. Careful disposals of government property assets could play an important role in creating additional funding,” Mr Kendrick continues.
“In relation to skills, the latest RICS and Tughans Construction Market Survey highlights that skill shortages are a growing issue for the sector. Housing starts in the last quarter were at their highest since 2007, and with many construction professionals and practitioners travelling outside of Northern Ireland to work, this is creating skills shortages at home. This highlights the need for the sector to think seriously about how to attract, retain and progress more people, particularly women, in the sector. RICS is committed to continuing to play its role, including through its ongoing Surveying the Future campaign, but collaboration between government, the education sector and across the industry is needed,” he adds.
Key points made in his Annual Report include:
- Investing more in capital spending will provide a boost to the economy through construction activity, which is highly economically impactful, and will help bring infrastructure up to standard
- Effective asset management in both the public and private sectors is key to the continuing recovery of the Northern Ireland economy, including managing the public estate and ensuring that opportunities to unlock value are capitalised on as the property market recovers
- More needs to be done to increase the supply of Grade A office space in Belfast to facilitate inward investment and support the rebalancing of the economy
- Increasing the amount of Grade A office space in Belfast has the potential to further encourage inner city living and boost the evening economy
- The Northern Ireland Executive needs to continue to work to address major issues in the planning system to support investment and construction activity, and sufficient training needs to be put in place around planning for both Councillors and Council staff in the new council structure
- There needs to be collaboration between government, the education sector and across the industry to address skills shortages in the construction industry
- Facilities Management is key to corporate competitiveness and needs to be an essential part of, and closely aligned to corporate strategy
- Greater priority needs to be placed on creating a shared future, as division costs the economy in Northern Ireland over £1billion per annum
- Northern Ireland is the only part of the UK and Ireland without domestic water charging, and introducing it could provide important funds for investment
- A cut in the rate of corporation tax in Northern Ireland could a considerable economic boost through increased inward investment