NORTHERN IRELAND
The restoration of devolved government has added stability and boosted opportunities in the region. Funding committed to the public and residential sectors is already leading to the progress of projects, especially purpose-built student accommodation, but more investment in infrastructure is required to unlock long-term economic growth.
MARKET CONDITIONS & PIPELINE
Fastest growth expected in infrastructure and repair and maintenance sectors
The market overall remains steady following the restoration of devolved government and on the whole there is optimism for the forthcoming year. But there is still a lack of direction from the Northern Ireland Executive and, in the absence of funding, some projects remain on hold.
The infrastructure and repair and maintenance sectors are expected to have the fastest rate of growth. The continuing need for infrastructure investment (water and sewerage systems) remains a concern with as a result significant delays anticipated to obtain planning approvals for schemes. This is already impacting the delivery of new projects and long-term transport investment in and around Belfast.
Commercial opportunities are currently limited. There is a focus on retrofit projects with supply for new office space outweighing demand in Belfast. We have seen a noticeable increase in the number of bid opportunities across the public sector.
There is an active appetite to increase sustainable energy production in the region with a strategic review ongoing on offshore wind provision. The current planning system, however, requires a number of policy changes to enable Northern Ireland to meet its renewable energy targets.
Clients, generally, are aware of the planning issues and still feel positive about their projects making progress.
RLB Market Activity Cycle
The RLB Market Activity Cycle is a representation of the development activity cycle for the construction industry.
RLB considers 10 sectors to be representative of the construction industry as a whole. Each sector is assessed as to which of three activity level zones – peak, mid or trough – best represents the current status of the sector within the cycle. This assessment is then refined by identifying whether the current status is in a growth phase or a decline phase.
The subjective current performance of sectors is identified by ascribing one of the coloured arrows (shown in the legend of the chart) to each sector. NB: In this analysis, sectors are not individually weighted.
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Market sector activity analysis: Northern Ireland
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of a region enables the calculation of a regional representation of percentage of sectors in each phase of the cycle at a point in time.
Market sector activity analysis: United Kingdom
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of multiple regions enables the calculation of a national representation of percentage of sectors in each phase of the cycle at a point in time.
TENDER PRICES
- Tender pricing has stabilised, though fit-out costs have increased in the short term. The forecast for 2025 is for a return to expected inflation levels of around 3.5%.
- Beyond the next 12 months, a stable, upward trend is expected of around 3.5% annually but with some local spikes due to skills and labour issues.
Tender price change: Northern Ireland
▉ RLB Northern Ireland
▉ BCIS (National) TPI ▉ BCIS (GBCI)
▉ Competitors (High) ▉ Competitors (Low)
INPUT COSTS
- Movements in commodity and materials prices are in line with UK trends for the industry.
- The persistent skills gap is continuing to impact labour availability and wages.
SECTOR FOCUS
Education
The education pipeline is set to increase. Following extensive consultation and workshops events, the Education Authority Framework for the Appointment of Integrated Consultant Teams for Above UK Procurement Threshold Construction Professional Services is set to be released to tailor the procurement process.
Healthcare
The sector is focused on maintaining and retrofitting existing assets to ensure the operational stability of existing buildings. Funding challenges are impacting delivery of pipeline projects.
Infrastructure
Preliminary works had commenced to improve the A5 North-West transport corridor, but have now been paused due to persistent legal challenges. The scheme to extend rail services across Northern Ireland is gaining momentum with indicative routes shared for consultation, though this is a long-term project to be delivered over the next 20 to 30 years.
Logistics & Manufacturing
The logistics and manufacturing sector in Northern Ireland has seen some growth, with site purchases and new distribution centres opening on the outskirts of Belfast close to the main arterial routes.
Public & Civic
There is increased optimism in this sector following an increase of public sector opportunities being tendered, though, contract awards may be hampered by a lack of funding.
Residential
The social housing funding pot has been reduced by 60% for this year, while there is continued interest in purpose-built student accommodation opportunities in Belfast. There is sustained demand for affordable and rented accommodation, with infrastructure capacity issues impacting the planning approval and delivery of new developments.
Retail
As reported in previous quarters, the focus remains on the refurbishment of existing assets, rather than new build, and we are seeing a spike in contractors’ fit-out costs. Out-of-town shopping centres remain attractive for investors following a number of high-profile transactions in the region.
Sport
The Casement Park redevelopment has not yet been approved with funding discussions ongoing. Investment has been secured for several Irish Football Association projects.
NORTHERN IRELAND
Alpha Housing
RLB is providing Alpha Housing with cost and project management services to support its delivery of much-needed quality social housing across Northern Ireland.
Two apartment block developments currently on site and due for completion by March 2026 are Parkside Gardens, Belfast, and Main Street, Cullybackey, Ballymena, which together will create nearly 40 new homes.
Data and analysis compiled by:
