Construction workloads in Northern Ireland were broadly flat through the second quarter of the year according to the latest Royal Institution of Chartered Surveyors (RICS) Construction Monitor, but public housing workloads rose at the fastest rate in two years and faster than all the subsectors.
On an all-sector level, a net balance of 2% of surveyors in Northern Ireland reported that workloads had risen through Q2, down from 4% the quarter previous.
Looking at the subsectors, both public housing and private industrial workloads were reported to have increased, with net balances of 21% and 9% respectively. Net balances of -6% and -8% of surveyors reported that workloads in infrastructure and private commercial had fallen respectively, and activity in private housing and other public works is said to have fallen flat.
Surveyors continue to report shortages in labour across all professions however at a less severe rate than seen previously. A net balance of 55% of surveyors report a shortage in quantity surveyors, down from 61% in Q1 and a net balance of 52% of NI respondents report a shortage in bricklayers, down from 57% the quarter previous. Regarding other construction professionals, a net balance of 32% of respondents reported a shortage, which is the lowest this balance has been in over three years.
Surveyors in Northern Ireland remain optimistic on the 12-month outlook with a net balance of 14% of respondents anticipating that workloads will rise over the next year. Although down from 28% in Q1, this is the second consecutive quarter this balance has remained in positive territory.
Despite the optimism for workloads, NI respondents anticipate that profit margins will fall over the next year. A net balance of -19% of surveyors expect profit margins to decline over the next 12 months.
Carolyn Brady, RICS NI regional board member and partner at Rider Levett Bucknall said: “It’s encouraging to see surveyors remain optimistic on workloads over the next 12 months amid the economic challenges that the industry continues to navigate. The welcome return of the NI Executive earlier this year is supporting the boost in public sector housing activity, which is much needed to serve our local communities.
“Whilst surveyors across Northern Ireland continue to report on shortages in skilled workers, it’s less so than seen previously, which is easing some of the pressures faced by the industry. As an industry, we’re continuing to work to overcome the skills shortages and attract the next generation of employees to the sector by working with schools and colleges and engaging with students who are considering surveying as a career. Anecdotally, we are seeing more interest and appetite for apprenticeship schemes with an increase in employers providing professional qualifications and development programmes. By supporting initiatives to grow our workforce, we can work towards increasing workloads in Northern Ireland which in turn will benefit the economy.”
Commenting on the UK picture, RICS Chief Economist, Simon Rubinsohn, said: “The overall tone of the feedback received to the Q2 RICS Construction Monitor is still pretty flat, although the forward-looking indicators are a little brighter even in the area of residential development, possibly reflecting some of the ambitious talk from the new government about ‘getting Britain building’.
“However, there are some major challenges identified by respondents that need addressing to secure the more meaningful uplift in both housing and infrastructure that appears to now be the focus of policy. In particular, planning reform was very much front and centre in many of the remarks from a large number of contributors, and it will be interesting to see the impact in our figures of this weeks planning and housing announcements.
“Concerns around finance remain prevalent although there is a sense that credit conditions in the construction sector will gradually improve helped by the prospect of the Bank of England beginning to lower interest rates”.
