New CEF President focuses on industry’s successes

In his remarks, which focused on the local construction industry’s successes as well as the challenges and opportunities ahead, Mr Hutchinson said, “The companies in this room have, down the years, collectively developed buildings that have truly transformed the Northern Ireland landscape. We should all be proud that our industry has played a leading role in Northern Ireland’s transformation, which is now regarded as one of the top places to live and work in the UK.

“Each year, our industry is fundamental to the progress of so many important projects across a wide range of sectors and I believe we should be very proud that what we do, in no small way, nurtures economic, social and cultural development.

“Few other local industries can match the scale, scope and impact of the construction industry and activities on the local landscape.

“I am particularly keen that Northern Ireland’s construction industry is recognised and celebrated as world-class alongside our other great innovative industries, from life sciences to technology, engineering to aerospace.  And is one that provides many rewarding career options.

“The need to adapt, grow, diversify and inspire young people is common to all industries and, in fact, all businesses, whatever the size.  That confidence must come from within the industry as well as outside.

“For our success as an industry to continue, we need to keep making investments for the future.”

Turning to the challenges ahead, Mr Hutchinson added, “Across the construction industry, there is a strong and united view that Northern Ireland’s political impasse has gone on for far too long.

“As the Federation has already said on the public record, there is a significant and increasingly harmful lack of governance within Northern Ireland. The industry is clear that the failure to restore the Northern Ireland Executive is a clear impediment to its sustainability and growth. This has had, and will continue to have, a major impact on tenders coming to market.

“With little political direction beyond the Executive’s Flagship schemes, it is impossible for future infrastructure planning across Government clients to properly take place.

“Unquestionably, the Executive’s Flagship schemes stand on their very clear economic merits. However, a balance must be struck in budgetary planning between how much resource is spent on these and other areas so as to avoid a massive cliff edge for the vast majority of firms not engaged on those Flagship projects.

“On housing, Northern Ireland shares the challenge that is currently facing the rest of the UK. While most of the policy announcements made in the Chancellor’s November Budget will not directly impact here as housing policy is devolved, they do too reflect a wider need for the restoration of a Northern Ireland Executive. The Executive’s Programme for Government was very clear that we needed to address our housing shortfall. Some work on addressing the shortfall has now commenced but it is far from what is required.”

On the work and role of the Federation and wider industry, Mr Hutchinson said, “In light of recent coverage regarding the sustainability of the construction industry, both locally and across these islands, the industry is of the view that further urgent steps must be taken to address the challenges we collectively face.

“As you all know, sub-economic pricing is an issue which the industry has been struggling with for a number of years and has been a significant contributing factor in the demise of a number of contractors in recent years.

“The impacts of sub-economic pricing are significant and have implications for clients, contractors and the wider economy. Clients end up with projects which are constructed to a lower quality standard than they require, defects are inevitable and there is a risk of the contractor being unable to complete the contract. Contractors end up incurring losses, attempting to recover losses from the supply chain and often fail to meet their legal obligations. In addition, they cannot invest in their businesses and their staff which results in them being even less efficient.

“To help address this issue, the mechanism proposed for pilot in last year’s Central Procurement Directorate Task and Finish Group report would, in our view, help deal with part of the issue. However, given the unrelenting negative impact that abnormally low tenders are having on both contractors and clients, we believe there is a need to advance this across the wider public sector.”

Concluding, Mr Hutchinson said, “I also believe it is imperative that we move ahead as an industry despite the political process – we cannot, and should not, allow the difficulties therein to be a barrier to our continued success.

“Now should be a time to show clear ambition and tenacity, properties that have long characterised our industry and the individuals within it.

“The fact that seven of Construction News’ Top 100 UK contractors are Northern Ireland businesses is evidence of our unique strengths, externally-expanding outlook and talented workforces.

“Building diversity within our industry is a core priority and an area I am personally very passionate about.  We must all be committed to building a strong diverse workforce in recognition of the proven value this will add to all our businesses.  Promoting career opportunities for women in construction and gender equality across the industry is a long-term commitment and there is much we can do if we work collaboratively this year and in the years ahead.”