Following the publication of its latest survey, the Construction Employers Federation (CEF) has called for urgent action from the Northern Ireland Executive.

According to CEF, its Construction Survey reflects a clear view within the Northern Ireland construction industry that the NI Executive must urgently agree its 2025/26 Budget to boost flagging confidence in the sector,.

CEF also want the first half of the year and the UK Government's Comprehensive Spending Review to chart a path towards a systemic and long-term change in how the decades of underfunding of the country's water and wastewater system is dealt with, 'ensuring that this issue stops being the inhibitor to economic growth and accelerant of environmental decline that it currently is'.

The survey, which collected data from NI-headquartered firms which have a collective annual turnover of approximately £2.8bn, covers 2024 and reflects on many of the key challenges that contractors, civil engineers and homebuilders are facing currently.

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The main findings included:

• 35% of respondents said their turnover had increased by at least 10% in 2024. However, 30% said their turnover was down at least 10% on 2023

• 40% said that their profit margins were worse in 2024 than 2023; while 25% said profit margins were better year-on-year

• Over the last year, only 65% of firms were operating at full or almost full capacity

On the industry’s skills challenge, the four top priorities that were identified were:

• Attracting new entrants by promoting construction careers in schools and communities

• Identifying skills needs and providing specific training tailored to the industry

• Development of entry-level skills programmes

• Enhancing the understanding of the routes into the construction industry

Looking to the next 6 months, the key challenges identified are the impact of NI Water underfunding, access to skilled labour and insufficient public sector budgets leading to a limited procurement pipeline.

Commenting on the results, CEF Chief Executive Mark Spence said: "Our Construction Survey's results reflect a period of increased challenge during the second half of 2024.

"Chiefly this was seen through a year-on-year drop in turnover and profit margins at a level that has not been seen since the first half of 2021. Coupled with a drop of 20% in the number of firms reporting full or almost full order books, there is clear evidence of a fragility in the market which many in the sector attribute to a declining pipeline of public sector works and the underfunding of enabling infrastructure such as water. 

"With the NI Executive's draft 2025/26 Budget now out for consultation, the industry is clear that its urgent finalisation is paramount as this will give all Government Clients the certainty they need to plan out their investment pipeline over the coming 12 months. 

"However, the NI Executive must again take this opportunity to reflect on how far its budget can actually deal with the social, economic and environmental challenges that face us."