CONSTRUCTION SECTOR REVIEW
MORE CLOSELY RELATED TO THE PERFORMANCE OF THE REPUBLIC OF IRELAND THAN GREAT BRITAIN, NORTHERN IRELAND’S ECONOMY REMAINS STRONG, ACCORDING TO AECOM, WHILE DECARBONISATION OFFERS GREAT OPPORTUNITIES FOR THE REGION… Stability returns to Northern Ireland’s construction sector
Northern Ireland had a ‘normal’ year in 2023 with more stability and predictability than in the volatile preceding years, according to a new construction report. While public infrastructure investment was stymied by ongoing political inertia last year, the private sector performed well and total construction volume output rose by 7.8% year on year, said infrastructure consulting firm AECOM in its annual review. Tender price inflation in NI rose 9% over the course of last year, meanwhile, but is expected to ease over the course of 2024 to an average of 3.1%.
Housing output remained strong in 2023 with an increase of 15.1%, mostly in public sector housing stock. House prices increased by 2.3% over the 12 months to August 2023, making NI the best performing region in the UK, where prices fell by around 5%. Retail activity was busy, with several large shopping centre transactions taking place. This injection of activity and liquidity will flow through 2024 to capital investment in refurbishment and should encourage new retailers to set up shop in NI, said AECOM. Vacancy rates are also dropping across NI, and particularly in Belfast. AECOM
said this sector is likely to continue to be challenged by rising costs and labour availability but on balance is positioned to have a better year ahead than anticipated 12 months ago. Published prior to the reinstatement of devolved government in NI on February 3, AECOM’s review identified inaction at Stormont as a barrier to growth preventing key strategic decisions on the country’s infrastructure and slowing down the pipeline. However, the Windsor Framework coming into full effect on October 1, 2023 had provided a clear path for NI
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