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Skills shortages and rise in cost of materials continue to impact NI construction workloads

Posted By:
Tughans Solicitors

5th May 2022

Royal Institution of Chartered Surveyors (RICS) & Tughans NI Construction & Infrastructure Monitor Q1 2022

Construction workloads falling flat in the first quarter of 2022 may be due to continued skills shortages and ongoing rises in the cost of materials, according to the latest RICS and Tughans NI Construction and Infrastructure Monitor. The results of the survey come as RICS calls for skills development to be high on the priority list of an incoming NI Executive and Assembly.

A net balance of +55% of Northern Ireland respondents recorded a shortage of skills, which is a similar pattern to that across the UK. A net balance of +60% said that they were experiencing a shortage of quantity surveyors and a net balance of +57% said that they were experiencing a shortage of other construction professionals.

Private housing and infrastructure were the only two subsectors to experience increases in workloads. The workloads for public housing were recorded as falling flat and both private commercial and private industrial experienced a decline. There are reports of investors pressing pause on projects due to the high cost and increasing risk of inflation and because of the potential rise in the cost of finance due to increasing interest rates.

It appears that Northern Ireland is falling behind the rest of the UK, with a net balance of +34% of UK respondents experiencing an increase in workloads compared to the NI figure of +4%. There is little optimism for this to change with a net balance of +2% of NI respondents expecting a rise in workloads over the next 12 months, compared to the UK average of +40%.

With skills shortages impacting Northern Ireland severely, the RICS is calling on the NI Executive to recognise, encourage and invest in the upskilling of built environment professionals to create a highly skilled local workforce in their Manifesto ahead of this week’s election.

Jim Sammon, RICS NI Construction Spokesman, said: “Unfortunately the tone of the construction market is not as upbeat in Northern Ireland as can be said for the rest of the UK. There are clear concerns around the skills shortage and lack of labour in the market. A big challenge for the sector is the new-found ability to work from home and many construction professionals finding better paying jobs outside of NI.

“It is clear that there is a significant skills gap, which may be a factor in construction workloads falling flat, and in order to meet the future needs of communities we need to attract and retain a larger and more diverse workforce.

“The manifesto released by RICS calls for the NI Executive to support more apprenticeships and to work with industry to deliver training which will close this gap. By supporting initiatives to grow our workforce, we can work toards increasing workloads in Northern Ireland which in turn will benefit the economy.”

Michael McCord, Senior Partner at Tughans, said: “Increased costs and shortages of skills and materials are causing severe problems for the construction market in NI. It is concerning to see that surveyors in NI are much less optimistic about the next 12 months in comparison to those in the UK. With the election on Thursday, there are hopes that the new executive will listen to the calls of the manifesto and recognise the value that a growing workforce can bring to NI, as well as understanding the value that commercial real estate has in supporting economic recovery as we emerge from the pandemic.”