Northern Ireland construction sector performed well in 2022 but Brexit continues to hamper growth

While the industry performed well in 2022, AECOM says a number of factors including Brexit, Covid-19 and the ongoing war in Ukraine have hampered growth

Northern Ireland's construction industry declined by almost 4% between 2021 and 2022, according to infrastructure consulting firm, AECOM.

While the industry performed well in 2022, the body said a number of factors including Brexit, Covid-19 and the ongoing war in Ukraine have impacted the results.

AECOM's annual review shows that "total construction output in Northern Ireland declined by 3.9% despite a robust ongoing pipeline". 

"AECOM does not believe this is indicative of a long-term trend but potentially a result of several factors including a lack of consensus over the Northern Ireland Protocol, a bounce back from pent up demand from the Covid-19 shutdowns and global pressures stifling confidence including the Russia-Ukraine war, which accelerated existing inflation," the firm said.

The review also show that in 2022, housing "bucked the trend" by increase by around 6.5% in the second quarter of 2022 which was driven by private housing development and "so far far has been able to manage inflation".

Detached houses increased in value at 10.8% - the largest increase in the sector.

AECOM added that in the year to come, "higher interest rates will temper the housing market but a shortage of ongoing food quality stock will prevent any significant reduction in property prices".

According to the firm's report, "one of the biggest surprises of the year has been a drop in repair and maintenance activity, despite demand for better energy efficiency and improvement to the country’s existing building stock".

Jody Wilkinson, the Director of AECOM in Northern Ireland said: "While the outlook for 2023 is good in the immediate term, the past three years have taught us that the global, social, political, and economic situation remains unpredictable. 

"We have come to expect the unexpected. A lack of resolution to the Northern Ireland Protocol, which was promised by early 2023, means Northern Ireland is missing out on the benefits of currently having access to both the UK single market and the EU single market. 

"We should be making the most of this unique position, attracting trade and investment. Politicians in Belfast, Dublin, Westminster, and Brussels need to find agreement to provide confidence and clarity to the Northern Ireland construction sector and prevent a dampening of private sector appetite."

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know.