Can Renewed Economic Growth Revive NI Construction?
There haven’t been many mini diggers or dump trucks in action on housing construction sites in Northern Ireland recently. But could that be about to change as the UK economy recovers from last year’s recession?
Recent data on house building was certainly disappointing. A report by Construction Information Services published this month revealed that only 1,577 new housing starts were made in Northern Ireland in the first half of 2024, representing only 27 per cent of the equivalent figure for last year.
As the Belfast Newsletter noted, there may be different reasons for the shortfall, with a survey by the Construction Employers Federation earlier this year suggesting a lack of wastewater infrastructure capacity has held up more than 8,400 new homes.
However, one obvious reason for a downturn in output could be the state of the economy, with the UK sliding into recession at the end of 2023, which may have stymied plans for new housing starts in the first half of 2024.
If so, things could change quickly as the economy grew by 0.7 per cent in the first quarter of 2024, the strongest growth in the G7, followed by stronger-than-expected growth in May of 0.4 per cent.
This could act as a significant stimulus to the construction sector and there are already positive signs of a major bounce-back across the UK.
Official figures for May showed a 1.9 per cent increase in volume from April, which had seen a 1.1 per cent contraction. While anecdotal feedback ascribed much of the improvement to far better weather in May, the figures would be in line with increased confidence gleaned from more positive economic data.
For this reason, it may be that, notwithstanding some structural issues concerning infrastructure, the fast-improving picture in the UK as a whole might soon show up in better new housing output numbers in Northern Ireland.
