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CN Briefing: Northern Ireland; CN100; regional construction

In the run-up to this year’s CN100 league table, which ranks the UK’s top 100 firms by turnover, I’ve spent a lot of time looking through company financial reports.

As part of that, it’s becoming clear that the words ‘recession’ and ‘legacy contracts’ are being used less frequently.

Granted, they may be gradually being replaced by the words ‘Brexit’ and ‘uncertainty’, but by and large the hangover of 2008’s recession is becoming little more than a memory for construction firms across much of the UK.

Unfortunately, that’s not true of every region.

Northern Ireland was the hit hardest of any UK region during the recession, with output volumes dropping by 37.5 per cent between 2007 and 2013, according to official government data.

Even now, recovery has been slow: output in 2015 was still 25 per cent lower than it was before the downturn.

Compare that to a market like Scotland, where output last year was 22 per cent higher than it was in 2008, or Wales, where output has finally climbed above 2008 levels in the past year.

Speaking to those on the ground, there are some familiar problems hindering this market’s recovery.

Clearly skills remains a huge challenge. While this is true in much of the UK, the issue is perhaps even more acute in Northern Ireland, with “planes full of guys leaving on Monday and coming back on Friday”, according to one interviewee.

Those challenges are also exacerbated by the free movement of workers between Northern Ireland and the Republic, with the weakened post-Brexit pound now prompting some to look south of the border for work, where wages have held up better.

On top of that, there’s a planning system that does the industry few favours: each of the country’s 11 regional councils makes planning decisions at a local level, leading to frustratingly slow processes.

What’s more, with the speed and quality of planning processes varying from one region to the next, it’s difficult to know how quickly projects will be approved – if at all.

No wonder then that some of Northern Ireland’s top contractors are said to be doing the bulk of their work outside their home market.

But it’s not all doom and gloom. The market recorded two consecutive years of growth in 2014 and 2015, after six consecutive annual declines, suggesting that workloads are finally on the up.

Meanwhile a new executive in place at Stormont has shown a proactive attitude to kick-start the industry.

Read the latest of our regional reports on Construction News tomorrow, complete with interactive data.

Also in the news

On the other side of the Irish Sea, Bam Nuttall is in pole position to build a new £300m tidal barrage project in Fleetwood.

Just in time for the new football season, the Football Foundation has kicked off the race for a £150m modular construction framework.

And Aecom’s head of government has some advice for what the chancellor must do to avoid post-Brexit chaos.

 

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