Local construction and property management consultancy, Rider Levett Bucknall (RLB), issued the third quarter of its Tender Price Forecast (TPF) report exploring the local effects of the wider national economic situation on construction activity, by focusing on regional perspectives and regional effects across the country.
Here Northern Ireland Partner in Northern Ireland Carolyn Brady gives an overview of the NI market and key findings from the TPF.
“What RLB’s Q3 tender price forecast reflects is the activity and pace happening within the local market, with much development and growth continuing within Northern Ireland, particularly within Belfast. We know that the future forecast will be impacted by economic downturns across the UK and the impact of squeezes on finances for contractors. However, there are sizeable projects in the pipeline both in the private and public sector with refurbishment and maintenance work in healthcare as well as new built to rent and purpose built accommodation within the education sectors.”
Northern Ireland is seeing some slowdown in the future pipeline, but with a reasonable amount of current onsite activity keeping the market relatively busy. Workload depending on public sector spending continues to be hampered by the lack of a functioning devolved assembly and future tender price forecasts are partially driven by this uncertainty. In turn, this may be compounding weaker economic forecasts and rising interest rates compared to the rest of the UK. While business confidence is down, the market is certainly looking for opportunities and there are sizable projects coming forward. Being a smaller market than the UK, any change in pipeline has typically weighed heavily into tender pricing as contractors look to fill order books. However, contractor sentiment is mindful of several high-profile insolvencies in the UK and input costs rising against a more competitive bidding environment. As a result, tender price inflation is not directly and solely correlating to pipeline.
Key findings from the report include:
■ The private housing pipeline is less robust but with both Build-to-Rent and Purpose Built Student accommodation seeing some notable activity and project starts despite interest rate pressures.
■ The healthcare pipeline looks robust, as does the education sector, partially driven by higher education projects returning post Covid.
■ The industrial sector also seeing good activity levels now and in pipeline prospects.
■ Retail and office schemes are being affected by new hybrid working and schemes going ahead generally include an element of repurposing or value add to assets.
■ Infrastructure schemes remain reasonably buoyant in terms of on-site activity, despite the absence of any significant devolved assembly spending, although pipelines are less robust following the Department of Infrastructure’s announcement of a number of paused schemes.