A fifth of Northern Irish construction firms operating at less than half capacity

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  • 07/06/2016
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A fifth of Northern Irish construction firms operating at less than half capacity
The forthcoming EU referendum is having a considerable impact on construction in Northern Ireland, with more than a fifth of companies operating at less than half capacity, according to a trade body.

The State of Trade report from the Construction Employers’ Federation (CEF), the representative body for the construction industry in Northern Ireland, and Pricewaterhouse Coopers, found that a decline in work available in Britain was a significant contributor to the decrease, with work there down from 15% in Q1 2014 to about 10% throughout 2015 and falling to 6% in Q1 2016.

The survey found that for the first quarter of 2016, 22% of companies were operating in ‘survival mode’, while the number of companies confident of growth fell slightly in 12 months, down from 50% in Q1 2015 to 48% in the first quarter of this year.

The proportion of firms reporting that their current workload had increased rose slightly to 33% in Q1 2016, from 27.5% in Q1 2015 but remained below the first three months of 2014 when half of companies surveyed reported increased demand and workload.

CEF managing director John Armstrong said the industry was not showing any real signs of sustainable recovery.

“This is another survey which suggests that the construction sector is not sharing in Northern Ireland’s modest economic recovery,” said Armstrong.

“The proportion of companies in survival mode is up, those anticipating growth and profitability are down and the percentage of work in Great Britain and Ireland has fallen.”

The survey asked CEF members their opinion on whether Britain should remain in the EU and 80% of respondents believed that it should remain, with just 16% supporting a Brexit.

“This is an industry for which borders represent barriers, where access to the EU market is important and where mobility of labour and currency stability is crucial,” said Armstrong.

“The fall in construction output across the UK in Q1 of 2016, has been attributed to concerns over the implications for continued EU membership. This may, in part account for the somewhat downbeat Northern Ireland results, but it is clear that the industry, right across the UK, has concerns about the outcome of the vote on 23 June.”

Armstrong said the one glimmer of hope for the sector was that a third of survey respondents expected the market to improve in the near future.

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