Local Northern Ireland property and construction management consultant, Rider Levett Bucknall (RLB)’s latest Construction Market Intelligence (CMI) shows that while the total volume of construction output remains stagnant, there is continued activity in certain sectors.
In its latest CMI report for Q1 2024, RLB comments that although progress in the construction industry is slow, there are clear plans for new-builds in the education, health and public sectors and demand for student residential accommodation is increasing.
Tender prices and Input Costs
While concern on inflationary costs remain, there is hope that a change in the NI Executive in 2024 will bring a positive impact on spending in the forthcoming period.
MEP contractors’ costs are still significantly higher than other trades, with inflation higher for these elements, but steelwork has cooled back down to 2022 levels and materials demand has relaxed compared to last year. Increases in materials and labour costs are mainly linked to increase levels of construction activity and limited availability of skilled resources.
While there are continued issues surrounding the use of the NEC Professional Service Short Contract form of contract which are impacting the market, there is still some new development for builds across the public sector. Healthcare estates funding remains tight, with cuts continuing across the region and the focus remaining on how to preserve existing assets, including how to optimise assets. There is increased activity in the logistics and manufacturing sector, with public sector framework contracts now established with ICT teams, and projects now gaining much needed traction and retail remains active with large portfolio sales resulting in wholesale refurbishment and retrofit schemes.
RLB’s Partner for Northern Ireland, Carolyn Brady, comments, “Construction output remains steady in the region, with some optimism of continued activity in sectors such as retail, education, especially higher education and logistics and manufacturing. The region generally is seeing funding cuts and on-going stop/start of public sector projects, but there is still much work in refurbishment and retrofit schemes especially within the private sector and asset optimisation projects with the public sector.”
To read the full RLB Q1 2024 Construction Market Intelligence, please click here.