Political settlement to boost ailing Northern Irish industry

Northern Ireland’s construction industry went into reverse in the second quarter of this year but this weakness should not last. After Theresa May’s minority Conservative government reached a power sharing deal with the Democratic Ulster Party, significant spending will flood into the province’s weakening construction industry. Glenigan’s economics director Allan Wilen said: “Northern Ireland has a relatively small and volatile construction industry that can be adversely affected if and when public sector work dissipates. “Some pockets of private sector growth areas exist. Industrial building, in particular, has expanded strongly for the last two years and infrastructure work, especially in the roads area, strengthened on the back of government investment and the settlement reached after the general election should boost starts.” Glenigan’s data shows that the underlying value of starts in the province edged up just 2% in 2014 but since then there has been a recovery and starts surged by 35% in 2016 only to tail off this year. Signs of a weakening in construction workload emerged in the Q1 2017 Northern Ireland Construction Market Survey from the Royal Institution of Chartered Surveyor (RICS) and Tughans Northern Ireland Construction & Infrastructure Market Survey. The survey showed that the province the only part of the UK to experience a slowing in workload growth with the balance of workload at a four-quarter low. Worse was to follow. In the more recent Q2 survey from RICS/Tughans, Northern Irish construction workloads fell for the first time in four years due to a lack of public sector spending and a further retrenchment in infrastructure. Andy Tough, the chair of RICS in Northern Ireland, says: “In relation to infrastructure, the recently announced additional money for Northern Ireland from Westminster looks set to provide a welcome boost for investment, but we also want to see a local Executive in place to ensure the delivery of long-term policies and decision-making that are vital to the development and growth of the economy.” With private commercial and private industrial workloads flat, private housing was the only construction sub-sector where activity in the rose in Q2 according to the survey. This was reflected in National House-Building Council data, which show that starts in the province in Q2 2017 surged 59% to 1,168 (Q2 2016: 735). Despite this, a contraction in private sector commercial and industrial work, which the Construction Products Association expects to put a brake on output nationally, has hit the underlying value of starts. The three months to July 2017 saw starts slump 59% and Glenigan forecasts a significant 25% fall for the calendar year as a whole.