Supply chain issues affected some construction works

RICS & Tughans NI Construction & Infrastructure Market Survey, Q2, 2020

The Q2 2020 RICS & Tughans Construction and Infrastructure market survey results predictably show a contraction in output in Northern Ireland, as workloads decline across all sectors. Anecdotal commentary from respondents also suggests that issues such as difficulties in acquiring materials through the supply pipeline are causing issues with projects.


In Q2 2020, 60% more contributors from Northern Ireland reported a decline rather than a rise (net balance) in headline workloads, as they slipped across all areas covered by the survey*.


This includes 64% more respondents reporting a fall in private housing workloads.  A solid decline in output was also reported across public housing and the other public works categories, as some anecdotal evidence reported that spending by the NI Executive on capital projects has seen a decline. Meanwhile, there was also a decline in infrastructure workloads with 21% more contributors reporting a fall (as opposed to a rise) during Q2.


Interestingly, Northern Ireland surveyors are also the most likely across the UK regions monitored to report that they are seeing shortages of construction professionals, with 36% reporting skills shortages in this area. This is perhaps in part related to some professionals being on furlough, given that a higher proportion of the overall workforce in Northern Ireland is on furlough.


Looking ahead, 41% more Northern Ireland surveyors expect workloads to decline rather than rise (net balance) over the next year. It is a similar story with regard to hiring intentions and profit margins with Northern Ireland respondents also expecting these to be lower in 12 months. Net balances of -44% and -63% were reported respectively.


Jim Sammon, RICS Northern Ireland Construction Spokesman, comments: “A weak Q2 survey was only to be expected given the impact of the pandemic on the construction sector. The fact that forward looking indicators are also lower in Northern Ireland than elsewhere in the UK will give rise to more concern though. As the economy seeks to recover, construction activity has a really important role to play and that needs to be encouraged and supported.”


Michael McCord, Senior Partner at Tughans, said: “We know how important the construction sector is to the prospects of the Northern Ireland economy. So whilst it is unsurprising to hear that it has been a very challenging past few months, the fact local surveyors expect workloads to decline at a faster rate over the next year is a real concern. The economic uncertainty resulting from COVID-19 will no doubt be the driving factor, but Brexit is also of course a real challenge for Northern Ireland companies. Government has provided considerable support to businesses and the economy since March but many, not least in Northern Ireland, will be looking to the Chancellor for further stimulus in the Autumn.”


Supply chain issues affected some construction works

August 7, 2020

9:46 am