Business

Construction workloads in north hit by fall in public sector activity

Property professionals continue to report a labour shortage (especially brickies) and warn of profit margins squeeze

Bricklayer setting bricks on a construction site.
Labour shortages continue to blight the building sector in Northern Ireland, particularly in among quantity surveyors and bricklayers, according to Rics

Workloads in the north’s construction sector have been hit again by a fall in public sector activity, in some areas dropping at the fastest rate in more than a decade.

And labour shortages continue to blight the building sector, particularly in among quantity surveyors and bricklayers.

The quarter three construction monitor from the Royal Institution of Chartered Surveyors (Rics) shows that overall workloads in Northern Ireland were broadly flat for the second consecutive quarter, but all public sub-sectors fell, with activity in public housing falling to its lowest rate since 2012.

Some 18% of surveyors reported a rise in private industrial workloads and 11% in private housing, whilst private commercial workloads were flat.

Local respondents’ expectations for workloads over next 12 months are less optimistic than property professionals in the rest of the UK, where about a quarter expect to see a rise.

And NI respondents to the monitor survey also indicate that profit margins will fall in the next three-month period and continue to be squeezed over the next year.

Jim Sammon
Jim Sammon, Rics’ regional construction spokesman

Jim Sammon, Rics’ regional construction spokesman, said: “The local construction sector continues to face a series of challenges, including pressures around costs, labour, and the availability of public finance for projects.

“Indeed, anecdotally, respondents point to public spending pressures as the major factor impacting on workloads. In this respect, the increase of some £270 million in Stormont’s capital budget as a result of the recent UK Budget is welcome, but it is imperative the Executive uses this additional funding to best effect.”

He added: “With public sector work playing such a vital role for our industry and wider economy, we need our government to make the built environment a priority, by investing in infrastructure projects to serve local communities, and working with stakeholders to adequately resource statutory authorities involved in the construction process, including in projects involving water, electricity and planning, so that conditions are created to attract greater private sector investment.”



Commenting on the wider and largely contrasting UK picture, Rics senior economist Tarrant Parsons said: “There are some encouraging signs of improvement for the industry as we move into the final quarter of the year.

“While growth prospects for the next 12 months appear to be brightening, challenges persist, particularly around tight profit margins across the industry and ongoing skills shortages. Industry professionals anticipate an improvement in credit conditions over the year ahead, which should provide a much-needed boost to industry confidence.”