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NI firms see steep growth in house building

Credit: PA Images

The number of new houses being built by local firms has increased substantially this year according to industry figures.

There has been a 16% increase compared to last year with major new office and retail projects also planned.

A study by the Construction Employers' Federation (CEF) found two-thirds of Northern Ireland-based companies worked at full or nearly full capacity in the first six months of 2017, although the biggest operators concentrated on sites in Great Britain.

CEF, though, tempered the positive news with a warning that failure to re-establish a Stormont Executive, the potential impact of Brexit, a skills gap and the rising cost of both labour and materials had eroded profit margins and hampered businesses' capacity to reinvest.

Managing director John Armstrong said, "The survey results reflect a local construction industry that is now well beyond its low point of 2012.

"Industry workloads are strong, with the last six-12 months having seen a substantial increase in new housing activity as well as encouraging growth in infrastructure work."

A survey by the Federation and accountants BDO said much of the recent growth was within private house building.

Larger firms which do most of their work in Great Britain are doing well but smaller firms which confine business to Northern Ireland and erect perhaps 10 homes a year are also prospering.

Mr Armstrong said the next year would be absolutely critical.

"The companies surveyed want to push on, they want to get beyond the stability phase that many have been in during recent years.

"The growth opportunities are there, the quarter-on-quarter increases in new housing starts and completions alone point to a house building sector which is beginning to once again play a full role in unlocking economic growth and opportunity."

He said companies anticipated higher costs and squeezed margins over the next year.

However, Brian Murphy, partner at BDO Northern Ireland, said expectations were that order books will remain steady and workloads sustained.

"The optimists outnumber others by almost three to one on this front."

The Titanic Quarter was singled out as an example of firms building speculatively then attracting buyers.

Official calculations expect more than 9,000 new homes a year to be built but the actual number of completions last year was only 6,400 units.

Social housing accounts for around a fifth of the total housing demand.