34% of Northern Ireland's largest construction firms are struggling to stabilise their business activities, and 16% are operating in survival mode, according to the latest quarterly survey from the Construction Employers Federation (CEF) and PwC.

The latest quarterly survey of Northern Ireland's construction companies shows that, in the three months to the end of June, only 19% of all the firms surveyed were operating at full capacity, down from 21% in the second quarter of 2014.

Dr Esmond Birnie, PwC's chief economist in Northern Ireland said: "These relatively downbeat data reflect the Ulster Bank Purchasing Managers Index for August, which shows declining levels of output, orders and employment.

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"Putting the survey in context, since 2007, Northern Ireland's construction industry has been the most severely impacted sector in terms of both output and employment.

"The impact of the financial crisis on the industry here was considerably worse than in GB; and, while local construction companies have won considerable volumes of new work in GB, the current level of output in Northern Ireland alone remains around 40% below the level experienced pre-2007.

"Looking forward, there is no clear consensus of sector-wide optimism; a third (33%) of companies expect economic prospects in Northern Ireland to improve; a fifth (21%) of respondents expecting things to worsen, while 38% foresee no change."

The CEF/PwC analysis suggests that a number of factors could account for the lack of confidence in the local industry, including the implications of recent budget difficulties facing the Northern Ireland Executive and the reduction in the roads maintenance budget.

Despite the indications of recovery in the NI housing market, where both prices and activity levels are rising, there is little evidence of a sustained bounce in private housing building. The market remains fragile, largely because of the debt overhang from the boom in the mid-2000s.

(CD/LM)