NORTHERN IRELAND
The restoration of devolved government will boost development opportunities in Northern Ireland in the long term, with funding already committed to residential and infrastructure projects that will help to unlock economic growth.
Collaboration between the public and private sectors will be crucial in addressing housing shortages and improving the social and economic outcomes from urban development. As the region strives to meet its net-zero carbon targets, we are likely to see a growing shift toward green building practices, adding to the pressure the construction industry is under to increase and upskill its workforce.
MARKET CONDITIONS & PIPELINE
Construction awaits clarity on Executive’s direction of travel
The market overall remains steady and the general sentiment is optimistic for the forthcoming year following the restoration of devolved government and agreement on a draft programme for government with a focus on growing a globally competitive and sustainable economy.
There has been a noticeable increase in the number of bid opportunities across the public sector, particularly in the education sector.
The infrastructure sector and repair and maintenance projects are expected to record the fastest rates of growth. The continuing need for infrastructure investment (water and sewerage systems) remains a concern and is impacting the delivery of new projects in Belfast. The Irish government’s commitment to spend £675 million on Shared Island investment priorities such as transport infrastructure has already begun to filter into Northern Ireland.
Planning approval timescales remain steady across local authorities. Investors and developers are mostly aware of the isolated planning issues that exist and remain positive about progressing their projects. The current planning system requires a number of policy changes to enable Northern Ireland to meet its renewable energy targets.
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
A ‘stable upward trend’ in tender prices is long-term forecast
Tender pricing has stabilised over the past quarter with a return to more typical increases in inflationary levels expected, at least in the short term.
As for the long-term outlook, a stable upward trend in prices is forecast but with some local spikes due to the chronic skills and labour shortages that exist in Northern Ireland.
Tender price change
▉ RLB Northern Ireland
▉ BCIS (National) TPI ▉ BCIS (GBCI)
▉ Competitors (High) ▉ Competitors (Low)
INPUT COSTS
- This quarter the impacts of movements in commodity prices on tender price levels have been generally in line with UK trends.
- Fit-out costs have noticeably increased in some sectors such as retail.
- The chronic skills shortage in the construction sector is continuing to have an adverse impact on labour availability and wages.
SECTOR FOCUS
Education
Education pipeline is increasing. The shared education campus at Ballycastle has been approved and will likely stimulate other developments. To tailor the procurement process, the Education Authority Framework for the Appointment of Integrated Consultant Teams for Above UK Procurement Threshold Construction Professional Services is to be released following extensive pre-consultation and workshops events.
Healthcare
While capital budgets have yet to be approved, the focus of the NHS continues to be on maintaining and retrofitting existing assets to ensure the operational stability of buildings.
Infrastructure
Preliminary works have commenced on the A5 North-West road link, a project supported by the Shared Island Fund to boost cross-border connectivity. Proposals for a long-term rail extension project across Ireland and Northern Ireland are gaining momentum with indicative routes shared for consultation.
Public & Civic
Budget cuts have been offset by news that £60m of Belfast Region City Deal investment has been unlocked with the signing of contracts for funding for three significant tourism projects, including Destination Royal Hillsborough.
Residential
Northern Ireland’s social housing funding pot has been reduced by 60% for this year. There is continued interest in purpose-built student accommodation development opportunities in Belfast
Retail
The retail sector’s focus remains on refurbishment of existing assets, rather than new builds. As a result, we are seeing a spike in contractors’ fit-out costs. Out-of-town shopping centres remain an attractive option for investors following several high-profile transactions.
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.
