Almost half of Northern Ireland (NI) construction firms are struggling with inflationary pressures, new research shows.
A survey by the Construction Employers Federation (CEF) found that 45 per cent of companies cited price rises as having a serious impact causing financial concerns – up from 25 per cent six months ago.
The CEF said its Construction Survey reflected an “alarming” return to systemic inflationary pressures in the sector not seen since 2022.
The survey collected data from NI-headquartered firms that have a collective annual turnover of approximately £3.5bn.
It focused on the key challenges contractors, civil engineers and housebuilders are currently facing.
The research comes ahead of next May’s NI elections and the CEF is urging the Assembly to spend the next six months laying the groundwork for a “relentless focus” on delivery of the industry’s key priorities for the 2027-32 term.
It said the inflationary pressures were accompanied by “critical” ongoing challenges such as the lack of an agreed NI Executive budget and the country’s ongoing new-build housing crisis.
As a consequence, it said it was vital that the remaining time of the NI Assembly was not “blighted by further political drift and delay”.
Mark Spence, chief executive of the CEF, said: “As we move towards next May’s elections, the overriding concern within the industry is that, with the already apparent onset of the election campaign, we face a six-month period where further political drift and delay will only exacerbate the critical challenges that we face.
“At a time when the sector is seeing the return of inflationary spikes in material costs not seen since the start of 2022, and the increasing impact this is having on project feasibility as well as company sustainability, it is vital that the NI Executive uses the months ahead to lay the groundwork for a relentless focus on delivery of the industry’s key priorities in the 2027-32 term.”
Other findings in the survey showed that turnover had increased for the majority of firms, with one in five seeing a 25 per cent rise in the past year.
However, 75 per cent said that profit margins remained stagnant or declined.
Comparing the end of 2025 and mid-2026, 95 per cent of respondents said they had seen material costs rise by up to 25 per cent.
Over the past year, 75 per cent of firms said they were operating at full or almost-full capacity.
It found that the industry’s top priorities for the NI Executive were for it to imminently set a budget for 2026/27 and to agree a legally binding commitment to ensure NI Water’s next price control is fully funded.
Firms also called on the Assembly to use its powers to raise revenue, to push forward an Infrastructure Levy and to commence work on a Planning and Infrastructure Bill to address the planning system.
“We stand ready to work collaboratively with the NI Executive to ensure that steps are taken now so that these longstanding roadblocks to economic prosperity can be unlocked in the years ahead. It is our clear view that, collectively, we cannot afford to fail,” Spence said.