The latest CEF Construction Survey reflects an alarming return to systemic inflationary pressures in the sector not seen since 2022. These pressures, accompanied by critical ongoing challenges such as the lack of an agreed NI Executive budget and our newbuild housing crisis, mean it is vital that the remaining time of this NI Assembly mandate is not blighted by further political drift and delay. Instead, the six months ahead must lay the groundwork for a relentless focus on delivery of the industry’s key priorities in the 2027-32 term.

The survey, which collected data from NI-headquartered firms which have a collective annual turnover of approximately £3.5bn, covers 2025/26 and reflects on many of the key challenges that contractors, civil engineers and homebuilders are facing currently.

The main findings included:

• Turnover had increased for the majority of firms over the year: 20% of respondents said their turnover had increased by at least 25% in the last year; while 35% said their turnover was up at least 10% on the previous 12 months
• However, 75% of respondents said that profit margins have remained stagnant or declined
• Over the last year, 75% of firms were operating at full or almost full capacity
• Inflationary issues have once again taken hold: 45% said they were having a serious impact causing financial concern – up from 25% six months ago
• Comparing the end of 2025 and mid-2026, 95% of respondents said they have seen material costs rise by up to 25%
• The industry’s top four priorities for the NI Executive as we approach the 2027 Assembly election are:

1. Immediately agree a budget for 2026/27 and set a course for a multi-year budget to be agreed to 2030 to be in place immediately after the election
2. Agree a legally binding commitment to ensure NI Water’s next Price Control, PC28, is fully funded
3. Use powers it already has to raise revenue so to grow its own budget – including bringing forward an Infrastructure Levy
4. Commence work on an ambitious Planning and Infrastructure Bill which seeks to address our broken planning system

• When looking to the GB and Ireland markets, three main reasons were given as to why they are more attractive for contractors than the NI market:

– More secure pipeline
– Company growth in new markets
– Increased profit margins

• On the industry’s skills challenge, the three top priorities that were identified were:

– Attracting new entrants by promoting construction careers in schools and communities
– Identifying skills needs and providing specific training tailored to the industry
– Development of entry-level skills programmes

Commenting on the survey, Mark Spence, Chief Executive of the Construction Employers Federation, said:

“As we move towards next May’s elections the overriding concern within the industry is that, with the already apparent onset of the election campaign, we face into a six-month period where further political drift and delay will only exacerbate the critical challenges that we face.

“At a time when the sector is seeing the return of inflationary spikes in material costs not seen since the start of 2022, and the increasing impact this is having on project feasibility as well as company sustainability, it is vital that the NI Executive uses the months ahead to lay the groundwork for a relentless focus on delivery of the industry’s key priorities in the 2027-32 term.

“Building on the publication of our manifesto for the 2027 NI Assembly Election in June – Delivery, not Delay – there are four key areas which we believe need immediate action in order to ensure the confidence of the industry to the end of this decade and beyond:

1. The NI Executive, working closely with the UK Government, must come to a speedy resolution on the agreement of a budget for 2026/27 and, given the timing of the election, 2027/28. The longer the impasse drags, as we know from bitter previous experience, then the greater the impact on the capital budget as it relates to the procurement and awarding of new public contracts. Availability of funds without the legal authority to spend is an absurd position to be in and one that has to be immediately rectified
2. Ahead of the UK Government spending review next spring, we must take the opportunity of agreeing a multi-year budget to 2030 more seriously than we have done to date. There are significant and well understood opportunity costs in not doing so – costs which not just impact industry’s pipeline of work but also taxpayer value for money
3. As the most recent report by the Wastewater Infrastructure Group detailed, the continued underfunding of NI Water has us set on a course for an economy that could be £10.9 billion smaller by 2040, equivalent to around £5,500 per household. Addressing the fundamental failing of the existing price control process – the lack of a legal guarantee from the NI Executive to fund it to the totality of the need set by the Utility Regulator – can begin to reverse our housing crisis which, today, sees a potential 55,000 new homes affected by some level of wastewater capacity constraint. This must also be accompanied by a detailed exploration of proposals we have made around an Infrastructure Levy and the agreement of an Infrastructure Transformation Fund with the UK Government
4. Build on the work of the Interim Regional Planning Commission, the Department for Infrastructure’s Planning Improvement Programme, and the Committee for Infrastructure’s planning review, to start the preparatory work towards introducing an ambitious Planning and Infrastructure Bill which seeks to address our broken planning system

“We stand ready to work collaboratively with the NI Executive to ensure that steps are taken now so that these longstanding roadblocks to economic prosperity can be unlocked in the years ahead. It is our clear view that, collectively, we cannot afford to fail”.

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