Northern Ireland slowdown worst since the mid-1990s

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Activity in the construction market in Northern Ireland has dropped off by about seven per cent over the past year.

The total value of construction activity in the first quarter of 2008 was £525 million – down from £563 million in the same quarter of last year – according to latest Government research.

The Northern Ireland Construction Bulletin, published by the Department of Finance and Personnel, revealed output fell by 2.8 per cent – or £15 million – in the first quarter compared to the last three months of 2007.

Economic growth in Northern Ireland is predicted to be at least halved this year, with accountant PricewaterhouseCoopers' latest economic outlook last month estimating growth of 1.25 per cent, well down on the 2.75 per cent enjoyed in 2007.

The Royal Institution of Chartered Surveyors has also released data painting a bleak outlook after it found the region's building industry is experiencing its sharpest slowdown in 12 years.

RICS said workloads were falling at their fastest rate since the beginning of 1996, driven by a near-halt of work in the private housing sector.

Figures released last week by the Department of Communities and Local Government revealed Northern Ireland house prices had plummeted by 9.4 per cent over the past year.

RICS also said the sector was being hurt by planning delays which were holding back important public sector works – like the multi-sports Maze stadium near Lisburn – and urged the Stormont Executive to act.

It was announced last month that more than 1,500 construction jobs had been lost in the region over the past year.

The Quarry Products Association has also warned as many as 700 jobs could go across its sector alone in 2008.

The Construction and Property Group – a new trade body formed by developers, contractors, surveyors and estate agents hit by the slowdown in the residential sector – said action had to be taken to save jobs within the sector.

A group spokesman said: "This number of job losses is an alarming development which will no doubt have a major impact on the local economy.

"At present we are working through a number of solutions to try and restart the construction and property market in Northern Ireland and encourage the local financial institutions to reintroduce liquidity into the market.

"These are issues we need to work collectively on to ensure that the market remains as stable as possible."

Boom to bust?

In autumn 2006, the then chancellor Gordon Brown announced that £18 billion would be spent in Northern Ireland over the next dozen years on a host of projects covering the health, education, water and roads sectors.

The Republic of Ireland also announced plans to spend £124 billion on similar schemes up to 2013.

Regeneration body the Strategic Investment Board held a series of roadshows in England to encourage firms this side of the Irish Sea to chase work. The SIB said contractors would have to team up with local firms for the work.