January saw the staging of the postponed MPA Health and Safety Awards and Conference in London when the latest innovations and good practices helping to keep workers in the UK mineral products industry safe and well were showcased – and it is congratulations to Kilwaughter Minerals on their success as winners of ‘Safer Through Improvements in Health & Wellbeing’ category.
Details of all the entries for the MPA Health & Safety Awards will be added to SafeQuarry.com, the free-to-access mineral products global hub for health and safety. Videos of the finalists and winning entries can be viewed on the MPA YouTube channel which also features a film of the whole of the 2022 awards event as well as previous years. Meanwhile, MPANI and HSENI have begun making preparations to host the All Island Safety Conference in October at the Armagh City Hotel. More on the arrangements will be published soon.
On the economic front nationally the UK economy saw a meaningful loss of momentum in the second half of last year and is expected to suffer a shallow recession in 2023 and contract by 0.9%, before a modest return to growth in 2024 (+1.4%).
As well as developments on global energy markets, chronically-weak business investment, structural issues in the labour market and public sector pay disputes threaten to hold back the economy’s progress over the next couple of years. The Construction Products Association’s (CPA) new winter forecast outlined a 4.7% decline in construction output in 2023 and only a modest 0.6% recovery in 2024.
Locally, the latest Construction Employers Federation survey and Ulster Bank monthly PMI report paint a fairly pessimistic picture, at least in the short to medium term, for the local construction industry. The CEF Construction Survey reflects a local construction sector that remains busy in terms of current workloads, but also a sector where immediate to medium term cost pressures prevail alongside a growing pessimism about market opportunities over the coming year.
The survey, which collected data from NI-headquartered firms which have a collective annual turnover of approximately £2.5bn, covers the last six months of 2022 and reflects on many of the key challenges that contractors, civil engineers and homebuilders are currently facing.
The main findings included:
- Looking at 2022, 50% said their profit margins had worsened or significantly worsened in comparison to 2021. Over the same period, 20% had seen an improvement in profit margins.
- 62% of respondents do not expect their annual turnover to increase in 2023. Indeed, some 43% are looking to consolidate their business over the coming 12 months – with 27% looking to increase profitability.
- 67% of firms said they were either at full or almost full capacity. Only 7% currently had capacity for significant levels of new work.
- Materials availability challenges have receded – 80% saying any issues are now manageable.
- Inflationary issues remain – 63% of respondents said these were continuing to pose serious financial concerns and 85% said they expect material costs to continue to rise.
The Ulster Bank PMI highlighted that Northern Ireland’s private sector started last year in expansion mode as the post-pandemic economic recovery gathered pace. Last January, businesses were optimistic for the year ahead with the expectation that growth would continue. This proved not to be the case. Largely as a result of the Russian invasion of Ukraine, which added fuel to the cost-of-living crisis, growth petered out and confidence ebbed away.
Northern Ireland’s private sector therefore ended the year on a much more negative note. December saw output and orders fall for the eighth successive month. The contraction in output was the steepest in a decade outside of lockdowns. All four sectors posted declines in output and orders although retail, services and construction firms did increase their staffing levels.
The good news is that inflationary pressures moderated with firms reporting the weakest rise in input costs in 22 months. As a result, firms raised their prices at their slowest pace in almost two years. But these price rises still exceed anything that occurred in the pre-pandemic era. This time last year, firms were braced for a challenging year, but it turned out much worse than anticipated.
December’s report suggests that negative sentiment is receding and that we may have passed peak pessimism. This year, expectations for the 12-months ahead are low but we could see the converse of last year with expectations being exceeded this time around.
MPANI has recently launched its 2023 Age Profiling Survey. The success and long term sustainability of any industry is dictated both by the quality of the people within it and its ability to attract qualified, enthusiastic young people with the right work ethic. The Association last carried out an age profiling assessment back in early 2020 that again highlighted the ongoing reality that we have an ageing workforce.
MPANI will use the results to inform members and relevant industry stakeholders of the critical succession, skills and recruitment issues facing the industry with a view to formulating and implementing an industry wide plan to address these worrying trends.
Meanwhile, MPANI are currently drafting its response to the Department for the Economy Consultation on the Circular Economy. This draft strategy sets out a vision that by 2050, Northern Ireland will have an innovative, inclusive and competitive economy where business, people and planet flourish, with responsible production and consumption at its core.
Construction material suppliers will have a key role to play in achieving many of the targets. Once again however I fear this is the public sector telling the private sector what to do!
At the same time the reality is most of the private sector are already innovating in terms of decarbonising, automating, energy efficiency and recycling. As many of you know and have direct experience of it, the public sector does not lend itself to quick decisions and risk taking. One just has to look at the adoption of renewable energy on the government estate and the roll out of electric vehicle charging infrastructure.