NI construction industry enjoys growth but shortage of skilled workers a worry

NORTHERN Irish construction firms enjoyed strong growth in the first quarter of 2018, 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, show that work is expected to increase during the next three months.

More construction SMEs have predicted rising workloads, growing from 38% in the previous quarter to 49% in January.

However, 90% of builders have reported increasing material prices.

More than half (58%) of construction SMEs are struggling to hire bricklayers and 55% are struggling to hire carpenters and joiners.

Two-thirds (66%) of construction SMEs expect salaries and wages to increase during the next six months, up from 62% in the previous quarter.

Gavin McGuire, director of FMB NI, said: “The first quarter of this year saw NI’s construction SMEs bounce back from a somewhat less positive position at the end of last year.

“The indicators are good currently with workloads, expected workloads and enquiries all on the rise. These results are particularly pleasing, and perhaps even surprising, given that firms have had to navigate choppy waters in the first three months of 2018.

“Builders had to contend with the ‘Beast from the East’, which saw some sites close for up to a week at a time. In addition to the cold snap, the cost of doing business for construction SMEs has risen considerably during the first quarter of this year. Firms have experienced spiralling material costs with 90% of builders reporting price hikes, which is the highest proportion on record.”

Mr McGuire added: “However resilient Northern Ireland’s builders have been so far this year, there is no room for complacency. The sector was working up from an incredibly low base in the last quarter of 2017 and what we need is not one set of positive results but for confidence to become more consistent and sustained.

“Looking ahead, 83% of firms believe material prices will increase over the next six months over and above the price rises already experienced. Two-thirds predict that wages will also tick upwards over the same period.

“Rising costs can be attributed to the acute skills crisis in construction — more than half of firms are struggling to hire bricklayers and carpenters. If margins continue to be squeezed, firms may struggle to make ends meet.

“These constraints may therefore threaten to stifle the recovery experienced over the past three months.”