Construction chief calls for urgent return of Assembly

ONE-IN-FOUR construction firms in Northern Ireland are performing worse than this time last year, with a senior industry figure warning of “a crisis point coming”.

John Armstrong (right), of the Construction Employers Federation (CEF), said the lack of an Executive at Stormont is hitting both major infrastructure projects and smaller procurement works.

He was speaking after the CEF and business advisory firm BDO released the state of trade survey for the first half of 2018. It found that

82% of building firms believe the absence of an Executive has resulted in the loss of capital or tenders.

The survey is based on the opinions of 88 of the best-known building firms, who between them represent 50% of construction output.

Some 25% said profit margins were worse than last year, with 12% reporting better margins and 55% staying the same. But against the backdrop of the ongoing political uncertainty, rising costs and labour shortages, the CEF said the fact that most firms maintained an equilibrium was positive.

However, when firms were asked what they felt was the most critical development to aid future success, 65% felt the restoration of an Executive at Stormont was number one.

Mr Armstrong said there was an “urgent” need for an Executive to make decisions on large projects and deliver a pipeline of smaller procurement contracts.

“With only 59 schemes in-procurement at the mid-point in the financial year, there is a crisis point coming within the industry,” he added.

“When we also consider the public sector capital budget is at its highest point since 2007 and several high-profile Executive flagship schemes are not running to their initial financial plan, there should be an abundance of opportunities for contractors to tender for public works.”

The survey reflected growing pessimism within the industry. One-in-three (34%) believe the industry will deteriorate this year, compared with 26% in the previous survey.

The responses, however, were more optimistic when addressing their own company, with 39% expecting their workforce to grow in 2018.