THE north’s construction sector grew in 2021 despite the challenges posed by Covid and Brexit, and the combination of material and labour shortages, a new industry barometer shows.
But it cannot achieve sustainable growth in 2022 until uncertainty around the Northern Ireland Protocol is resolved, authors AECOM claim.
The report says there was a 60 per cent surge in total exports from Northern Ireland to the Republic in the first 9 months of 2021 compared to the same period in 2020.
And by the second the second quarter last year, construction output was already at 3.8 per cent above the pre-pandemic levels in the final quarter of 2019.
Infrastructure consulting firm AECOM said 2021 "proved to be a surprising year" in relation to the NI Protocol and how pronounced the effects have already been on trading patterns within the British Isles.
And as trade between businesses in Britain and the Republic became more complex, total exports from the north to the Republic rose by 60 per cent to £2.4 billion in the first nine months of the year, while over the same period, imports from the south to the north shot up 48 per cent to £2.1 billion.
AECOM Northern Ireland director Jody Wilkinson said: "Leaving politics aside, the Protocol seems to be having an overall positive effect on the north's economy in the sense that it is an advantageous position of having one foot in and one foot out of both the EU single market and the UK market, and companies who are locating to Northern Ireland cite this as a key draw.
"But businesses are still extremely cautious as they wait to see if the UK Government will trigger Article 16, which could see Northern Ireland lose its current advantage amid an atmosphere of uncertainty.
"During 2021 the sector was dealing with the double whammy of global material shortages and the added layer of complexity brought about by the structural changes of the Protocol.
"Some contractors were forced to wait months for some of the most basic construction materials like timber, steel, and cement and it does not look like that will improve much in 2022.
"A shortage of skilled labour is also an issue as we work through pent-up demand from last year’s disruption. A healthy pipeline of work in Northern Ireland is compounding the problem, as is the strong industry rebound in the Republic."
AECOM says it expects 2022 to be more ‘normal’ with fewer extremes than the last two years with the construction industry and wider property industry enjoying a solid workload over the next 12 months.
And if uncertainty around the Protocol is resolved, it predicts a year of sustainable growth, with tender price inflation of around 4.5 per cent.
