Bleak outlook for construction industry

CITB-man Output forecasted to stabilise in 2013 with minor growth predicted in 2014.

The Northern Ireland construction industry has gone through one of its most difficult economic periods and after five years of steep decline, construction output in Northern Ireland is expected to stabilise in 2013 with small levels of growth anticipated from 2014 onwards.

The Construction Skills Network (CSN) report for Northern Ireland 2013-2017 is the industry’s annual skills forecast prepared by ConstructionSkills (the Sector Skills Council for Construction) with input from construction employers and stakeholders across Northern Ireland.

Over the four-year period to 2017, output is forecast to grow at a modest annual average rate of 1.7 per cent, a stronger growth rate than for the UK as a whole (0.8 per cent). However, Northern Ireland has experienced a much steeper decline than the UK as a whole in the five years to 2012 (37 per cent compared to 16 per cent) and is therefore coming back up from a much lower base. The private housing sector has been by far the worst performing sector in the Northern Ireland construction industry in recent years, having contracted by nearly three quarters since its output peak in 2006.

Whilst construction output is expected to start to rise again from 2014, construction employment is expected to continue to decline until 2016 due to the normal lag between changes in output and employment levels. However, the lag is believed to have widened due to the relatively high levels of underemployment or excess capacity which currently exists within the industry. This under-employment will need to be used up once industry gets back to a growth path before employment starts to rise. Therefore on an annual average basis, the decline in employment is expected to be around 1.5 per cent over the four-year period to 2017.

Recruitment to the industry is predicted to be an average of 660 per year from 2013 to 2017, considerably lower than last year’s forecasts. Weakening levels of demand for construction services has meant the recruitment requirement will be solely to fill vacancies created by those leaving the sector.

Barry Neilson, Chief Executive of CITB-ConstructionSkills NI, says: “2012 was a tough economic year for the local construction industry. Public spending cuts and lack of investment in the private sector have resulted in many companies ceasing trading and others turning to markets outside NI for work. Whilst the forecasts suggest a slight growth from 2014, the construction sector seems a long way from the output levels seen at the recent height of construction activity in 2007, and it is unlikely we will see those levels of activity return for a very long time.

“What is bad for construction is bad for the economy. Construction remains the only industry that can kick start the economy in the short, medium and long term. We need to try and work hard through these difficult times. With this in mind CITB-ConstructionSkills NI, along with key industry partners, is working together to find ways of ensuring we maintain a skilled and qualified workforce both now and for the future so that we are ready to take advantage of new investment opportunities and, in the long term, the economic upturn.”

To download the Construction Skills Network Report Northern Ireland 2013-2017, visit: www.cskills.org

About the Research

The Construction Skills Network (CSN) report, led by ConstructionSkills, is a major piece of labour market research and the leading source of data for the construction sector, giving the industry and its stakeholders the information it needs to plan for the next five years.

About CITB-ConstructionSkills NI

As the Industry Training Board and a partner in the Sector Skills Council for Construction, CITB-ConstructionSkills NI, is funded by a statutory levy from registered in scope employers. The organisation provides a range of services to the industry which incorporates identifying training needs, encouraging and advising on training, provision of training grants and research and policy development. www.citbcsni.org.uk

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