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
“Eight out of ten construction firms have experienced delays in their supply-chains as a result of either COVID-19or Brexit.”
be welcomed. To build confidence within the industry it is important that its detailed planning its speedily undertaken and published by Departments – and that Government Clients fully understand the multitude of pressures that contractors are currently facing. As we move into the new financial year, it will then be crucial that the Executive works with the industry to develop and embed a recovery strategy that seeks to incentivise the commercial sector to recommence investment. “We know from the experience of the 2008 recession that the construction industry always feels a lag in terms of the worst effects of an economic downturn. The warning signs are already there. It is incumbent on those that value the sector to ensure it doesn’t come to pass.” Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said: “Three key challenges evident in the latest CEF Survey concern demand, supply-side disruption and inflationary pressures. In turn, the interaction of these factors will put pressure on profitability. Indeed, the spectre of negative profit margins may become more widespread this
year like it was a decade ago. “Eight out of ten construction firms have experienced delays in their supply-chains as a result of either Covid-19 or Brexit. Supply- chain disruption is not just down to Brexit and Covid-19 as the global shipping industry is struggling to deliver what the world wants to buy during lockdown, impacting on manufacturers, consumers and the construction industry. “Resilience and patience are two qualities exemplified by the construction industry. And these virtues will be tested in the coming months. Indeed, local construction firms face a perfect storm of uncertainty as far as public procurement and tendering are concerned. Supply-chain disruptions alongside significant price rises
for construction related materials make it difficult, if not impossible, for firms to accurately price tenders on a profitable basis. Given that Northern Ireland’s public procurement tenders are awarded on ‘price only’ evaluations this presents risks to both firms’ profitability and the quality of the projects undertaken. A lack of sufficient workloads could lead to a race to the bottom on price. While this may appear desirable from a value for money perspective, it is not sustainable – nor in the interests of the local economy – to have an unprofitable construction sector.”
For more information on the Construction Employers Federation,
T: (028) 9087 7143 E: mail@cefni.co.uk visit: www.cefni.co.uk
Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank.
CEF Managing Director, Mark Spence.
www.northernbuilder.co.uk
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