C O N S T R U C T I O N E M P L O Y E R S F E D E R A T I O N T H E V O I C E O F T H E I N D U S T R Y
CONSTRUCTION EMPLOYERS FEDERATION RELEASE STATE OF TRADE SURVEY SHOWING THE IMPACT OF LAST SIX MONTHS OF 2020 ON NI CONSTRUCTION INDUSTRY... CEFState of Trade Survey finds contractors facing into ‘perfect storm’
K ey findings from the Construction Employers Federation State of Trade Survey has shown a resilient sector in the second half of 2020 – but one with significant concerns about workloads, profit margins and supply chain delays. The survey, which was conducted in early January and covers the last six months of 2020, contained the responses of 80 Northern Ireland- headquartered construction firms with combined turnover of £1.5bn and reflected an industry that got back on its feet with the lifting of restrictions on its activity but which, at the start of 2021, looks into what may be the most uncertain future it has seen since the 2008 recession. Mark Spence, Managing Director of the CEF said of the survey: “The CEF is immensely proud of its members, their employees and
supply chains who did so much throughout 2020 to put in place the infrastructure that enabled our health and wider public services across these islands to meet the challenges of the pandemic head on. “Our survey very clearly shows that, with the easing of restrictions on construction activity in the second half of 2020, many firms were able to recover a large part of the turnover lost in the first half of 2020 and, crucially, do it in a Covid-secure manner. “However, what is equally apparent from the survey is that many contractors believe we are facing into a perfect storm. “With a subdued commercial market this year, and likely next, there will undoubtedly be more competition for public works. While this, in many ways, should be seen as a good thing – it must be acknowledged
that this is occurring at a time when a significant number of public sector works are being procured as ‘price only’. The absence of ‘quality’ with respect to tender scoring has the capacity to drive the market down to unsustainably low pricing. “The challenges are exacerbated by the early year impacts on materials supply and pricing. While well publicised issues on matters like steel imports will, likely, begin to resolve themselves on the supply side – where the price will settle is, at this stage, harder to gauge. That, alone, puts massive pressure on contractors now to price appropriately for both one off projects and, more alarmingly, longer term arrangements such as measured term contracts. “The draft Northern Ireland Executive Budget for 2021/22 that is currently out for consultation shows a growth in annual capital expenditure that is to
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