CONSTRUCTION businesses in the north showed 'a tremendous capacity to adapt' during the pandemic, yet the sector still endured a collapse by nearly a third in 2020.
But the industry will remain stable this year and, despite the challenges presented by Covid-19 and Brexit, should one of the better performing sectors, according to a report by US consultancy firm AECOM.
And the report points to the cost of construction increasing by 1.5 per cent in 2020, with another 1 to 1.5 per cent hike likely this year.
However, it predicts that once the current pent up demand from the period of lockdown slows, there will be a reduction in the cost of labour.
And despite global competition for supplies as a result of the pandemic, the new trade agreement between the UK and EU will help mitigate against any significant cost increases in materials for the industry in Northern Ireland.
Jody Wilkinson, director of AECOM Northern Ireland said: “Throughout the entire pandemic, the construction industry demonstrated both its resilience and resourcefulness.
“The modest growth figures which have been recorded and the reasonable outlook for 2021, place the construction industry in a favourable position despite the ongoing challenges presented by Covid-19.
“The industry did experience a significant shock in 2020 with a reported collapse of 30 per cent in the height of the pandemic.
“Hospitality, retail, and commercial development has all but halted in Northern Ireland and, while hospitality and retail should expect a modest recovery in 2021, the future is unclear for commercial construction due to the reduction in demand for office space.”
He said that October, the construction industry was the strongest part of the economy in the north and the only sector to report growth in output and orders that month.
“But the rebound in activity and quick recovery was undoubtedly due to the government supports available during the pandemic and the continuation of public projects and developments.”
Mr Wilkinson said that while the current situation with potential tariffs on steel imports is worrying for industry, its impact on output for 2021 will depend on if/when it is enforced and if counter-measures are put in place by the Government.
Also, as sustainable building practices continue to expand, this could be the catalyst that shifts demand from steel to more environmentally friendly alternatives such as timber for certain buildings.
“Housing will be the key for sustained industry growth this year. The persistent demand for housing permeates across both the public and private sector as the population continues to grow, with a projected increase of 3.5 per cent by 2033.
“The introduction of the Belfast 2035 growth plan and an increased focus on sustainable transport models also present real opportunities for the industry this year.”
