Key Northern Ireland findings of the AECOM Ireland Annual Review of the Construction Industry include –

• Stable year for the Northern Ireland construction sector in 2017, with continued growth expected in 2018
• Resources and tender inflation biggest challenges for construction projects
• Majority of growth has come from infrastructure works and from private investment

Findings from AECOM’s Ireland Annual Review of the Construction Industry show that even despite political uncertainty, Northern Ireland’s construction industry output value grew. In the 12 months to Q2 2017, construction value grew by 11.6% in value terms compared to the previous 12 months. The review predicted that 2018 is set to be another stable year for the industry. Global infrastructure services firm AECOM launched the Review at an event in Belfast city centre.

The Review, which includes the results of a survey of professionals in the construction and property sectors in Northern Ireland and the Republic of Ireland, reports that the majority of growth has come from infrastructure works and from private investment, particularly in Belfast. The shortage of Grade A office accommodation in Belfast is still an issue. However, the private sector has started to address this, with a significant amount of additional square footage coming to market throughout 2018.

One of the biggest and most exciting redevelopment schemes expected to come to market in 2018 is the £400 million Sirocco site in east Belfast. The site comprises over 16 acres of undeveloped brownfield space right in the city centre, with proposed offices and commercial, retail, residential and high quality public spaces certain to have a significant positive impact on Belfast’s future.

Given the political impasse, the Westminster government has produced a budget for Northern Ireland that essentially increases spending by around 3.1%, so that in real terms, it will be equal to 2017. The £1 billion additional funding agreed between the Conservative government and the Democratic Unionist Party (DUP), in return for DUP support in parliament, has not yet been fully realised due to the stalling of the Northern Ireland Assembly. But at the time of writing, the first phase of funding was being planned for release. Ultimately, the overall package will have a significant positive impact on public sector capital spending when it is made available.

Meanwhile, house prices in Northern Ireland, which are usually seen as a barometer for confidence in the wider economy, continue to recover with an average annual increase of six per cent to Q3 2017.

The construction industry in the Republic of Ireland has seen the value of output rise by circa 18% in 2017 and is expected to increase by 14% to approximately €19.5 billion in 2018. Last year saw increased construction activity extending beyond the Greater Dublin Area.

Trevor Leaker, Director – Architecture and Engineering Ireland, AECOM, said: “Despite political uncertainties, both in terms of the suspended Assembly and Brexit, Northern Ireland’s construction industry enjoyed a stable year in 2017 with steady growth across the sector. As with 2017, even despite political headwinds, we project further growth within the construction industry and some inflation as a fallout of the continued reduced value of sterling.”

 

 

Trevor Leaker, Head of Buildings & Places, AECOM; Daniel Lawton, US Consul General