Political stalemate ‘playing its part’ in downturn of the local construction industry

THE year-long political deadlock at Stormont has been a factor in the “significant downturn” of Northern Ireland’s construction industry.

John Armstrong, managing director of the Construction Employers’ Federation, said the lack of Executive had “begun to feed through”.

Mr Armstrong said: “While workloads for Northern Irish headquartered contractors have remained broadly positive and the vast majority of the industry is beyond purely focusing on its own survival, the year-long political deadlock at Stormont as well as other political and economic challenges have clearly begun to feed through.

“Factors like the weather have played their part but, as many have already said, not at the level to account for the significant downturn in activity that has been seen.”

Mr Armstrong was commenting on figures on United Kingdom construction sector output released by the Office for National Statistics (ONS) for the three months until March. UK construction output suffered its biggest decline since August 2012, adding to evidence of “sluggish” economic growth in the first quarter.

It had fallen by 2.7% in the three months to March — the biggest fall on a three-month basis since August 2012. During the month of March itself, construction output fell by 2.3%.

Figures were also released showing that manufacturing fell by 0.1% in March compared to February, though survey-led evidence suggested the heavy snowfall had “no significant impact” on output.

Total UK production rose by 0.1% month-on-month, thanks to higher energy demand during the wintry weather.

On a three-month basis, the index of production rose 0.6% compared to the three months to December 2017 — again mainly due to a rise in energy supply, which was up 2.5% over the period.

The ONS said a small number of survey respondents said snowy weather affected their business in both February and March.

However, the statistics agency said it was difficult to quantify the exact impact that the storms had on the industry.

EY ITEM Club chief economic adviser Howard Archer said the outlook “may well remain challenging, with the weakness of the economy in the first quarter likely to fuel concerns along with still significant Brexit uncertainties and limit clients’ willingness to commit to new projects”.

Challenges: John Armstrong