No respite for under fire building trade

Jim Sammon.
Jim Sammon.
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The recession plaguing the North’s construction industry is expected to continue over the next year, a Derry businessman has revealed.

Jim Sammon, spokesman for the Royal Institution of Chartered Surveyors (RICS), was commenting on the publication of a new report which concludes that the local building sector remains firmly in the doldrums.

The RICS Construction Market Survey for the past three months - April, May and June - reveals that Northern Ireland continued to significantly lag other UK regions in the second quarter of the year, with a balance of -42% of chartered surveyors reporting declining workloads.

Scotland was the next most severely impacted, with a balance of -22%. London/South East and South West/Wales were the only two regions of the UK not to report declining workloads.

All construction sub-sectors in Northern Ireland experienced a fall in activity during the three month period, the survey shows.

Expectations for the construction sector across the North also remain negative, with further falls in workloads, employment and profits expected.

The balance for profit expectations was -86%.

Jim Sammon says: “With finance constrained, private sector activity remains scarce, and many firms are increasingly turning to markets outside of Northern Ireland for work.

“There have been some important announcements of public sector projects, but it remains to be seen what impact this will have on workloads in the coming quarters.

“For now, across the board, Northern Ireland’s construction sector continues to experience a severe recession and the expectations of chartered surveyors are for this to continue over the next 12 months.”

Meanwhile, separate research suggests that the total volume of construction output in the North in the first quarter of 2012 increased by 1.3% compared to the same period in 2011.

Output has also shown quarter-on-quarter growth over the last three quarters.

But the current levels of output are still around 40% lower than peak output in 2007.

The industry had been stuck in a deep depression after the bursting of a property price bubble led to four years of falling output.

Thousands of jobs have been lost in the sector and a significant number of firms have gone out of business.

Most of the big construction firms have had to refocus on markets outside Northern Ireland and profits margins have been squeezed by intense competition.

The Northern Ireland Statistics and Research, NISRA, which produces the figures, said that, while the increases in output over the previous two quarters were relatively small, the latest increase is much larger.