Local construction and property management consultants, Rider Levett Bucknall (RLB UK) claims the Northern Irish market remains steady and the sentiment generally is optimistic about the next 12 months, according to its latest Construction Market Intelligence report Q2 2024.
Long-term outlook points to more competitive tender prices
While there are currently still concerns over the impact of inflationary costs, in the long term, the re-establishment of the power-sharing Northern Ireland Executive should boost spending on public sector projects. This in turn, is likely to attract growing interest from contractors and make tender pricing levels more competitive.
Movements in commodity and materials prices within the region are in line with UK trends for the industry although there is a spike in contractors’ fit-out costs in the retail sector. Skills gaps are impacting wages and labour availability with wage expectations for skilled labour increasing, particularly within MEP trades.
The report from the built environment consultants, who are based in Upper Queen Street, Belfast, highlights that the restoration of devolved government should lead to new development and revised strategies which bring about improvements in the planning process and the agreement of, for example, a housing supply strategy. But currently there is still a lack of direction from the Northern Ireland Executive and, in the absence of funding, some projects remain on hold.
The Irish Government’s funding commitment of more than €800m for cross-border projects under the Shared Island initiative will filter directly into Northern Ireland. The Derry and Strabane region is already benefitting from new investment in transport infrastructure. Newry, Mourne and Down District Council is progressing through its planning backlog with traction on projects.
Regional Sector Focus for Northern Ireland
Education
Education pipeline is increasing. The Education Authority, which is responsible for delivering education services across Northern Ireland, held a pre-market consultation in March for the appointment for seven new school projects (following the withdrawal of tenders last year).
Health
Budgets for this coming financial year have not yet been approved. The main focus of clients is on maintaining and retrofitting existing assets to ensure the operational stability of buildings.
Infrastructure
The Irish Government has committed €600m of funding through the Shared Island Fund to the long-awaited upgrading of the A5 North-West road link, which will boost cross-border connectivity on the island.
Residential
Residential development opportunities are steady, particularly for social housing. There are 1,348 new hotel bedrooms in the pipeline for Belfast. Three hotel projects are either in pre-planning or have submitted planning applications, including for The Dean, a new boutique hotel on Bedford Street.
Retail
The market remains focused on refurbishment of existing assets rather than new-build projects. There have been several large transactions involving shopping centres, including Forestside in Belfast and Rushmere in Craigavon.
Sports
The Irish Government has committed €50m through the Shared Island Fund to contribute to the redevelopment of Casement Park in Belfast as a landmark sports project and enable it to host matches as part of the EURO 2028 tournament.
RLB Northern Ireland Partner, Noel Devine comments, “The restoration of devolved government is a huge boost to Northern Ireland’s prospects and the construction market. It has already secured investment in infrastructure projects from the Shared Island initiative, which will improve connections between North and South. There is growing anticipation of funding commitments from the Northern Ireland Executive for public and residential developments that will help to unlock economic growth and regeneration.”
For the full RLB’s full Construction Market Intelligence Q2 2024, please click here.
