Construction output falls 7.5%25/01/2013 - 15:27:15
The construction sector has slumped for the second time in six months in Northern Ireland.
Output was 7.5% lower from July to September than the same period the previous year. One explanation for the decline is a decrease in new work, a report said.
The decrease is the second successive quarter in which there has been a drop, according to figures published this week.
Output was valued at £460 million (€540 million) – the lowest figure in the last five years.
Although disappointed with the figures, Finance Minister Sammy Wilson remained optimistic, saying: “The £200 million (€234 million) economy and jobs initiative announced by the First and Deputy First Minister is a significant amount of additional funding and will provide further much-needed resources to help the construction sector over the remaining budget period.”
The building sector’s value was worth 42.3% less now than in 2007, the Northern Ireland Statistics and Research Agency (NISRA) said. Housing construction remained at the same level as earlier in the year.
This week the minister announced £11.8 million (€13.8 million) of funding for new housing schemes as part of the UK Government’s Get Britain Building initiative.
Mr Wilson also introduced special bank accounts in an attempt to make it easier for government contractors and sub-contractors to be paid.
“We have taken forward a number of measures including simplifying the tender process and working in partnership with the industry to improve prompt payment throughout the supply chain; publicising government tendering opportunities widely through a single website; and producing procurement guidance aimed to encourage SME (small and medium enterprise) participation,” the minister said.
He added: “The Executive has allocated over £100 million (€117 million) of public expenditure on structural maintenance alone during this financial year, with a further boost following the January monitoring round for our roads infrastructure.”
As a key economic indicator, the construction sector can be used to measure overall performance of Northern Ireland’s economy.
Esmond Birnie, chief economist at PricewaterhouseCoopers, said growth in the general economy had been subdued.
“Part of 2012’s flat growth can be attributed to mining and quarrying suffering its biggest output decline since records began, weak North Sea oil and gas production and continued woes afflicting the construction sector, but none of these should be as pronounced in 2013.”
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