The most recent Ulster Bank PMI in August showed that Business activity in Northern Ireland had increased for the second month in a row but the rate of expansion was lower given a reduction in new orders.
Construction in particular saw activity drop back from the strong rebound witnessed in July. NI companies in all sectors remained pessimistic for the 12 months ahead mainly due to concerns over the continuing COVID 19 emergency and Brexit.
Certainly the increasing R number in Northern Ireland and the fallout from the passing of the UK Internal Market Bill indicate very challenging times ahead.
I attended a meeting recently with the Department of Finance Permanent Secretary, Sue Gray, during which we discussed the Northern Ireland Construction Group (NICG) paper on Construction Industry Recovery. NICG colleagues stressed strongly the need for quick decisive decision making to get work out into the economy that will create the widest possible economic ripple effect.
Urgent investment and schemes for housebuilding, roads water and sewerage infrastructure maintenance and renewable energy projects were identified as key
target areas. We highlighted the fact that the current high construction activity was temporary and painted a false economy and that to avert significant redundancies across the construction sector the Executive urgently needs to stimulate confidence and deliver clarity about capital investment in construction in the short to medium term.
The announcement by Infrastructure Minister, Nichola Mallon, that she had given planning permission for the North South Interconnector is good news for everyone. The Interconnector is a crucial piece of economic infrastructure which will support prosperity and employment across the island of Ireland. It will ensure the effective operation of an efficient all island electricity market and support the provision of a secure, sustainable, and cost-efficient electricity supply across Ireland. I recently submitted a response to and consulted directly with the Infrastructure Ministers advisory panel investigating the rational and benefits of an Infrastructure Commission for Northern Ireland. I highlighted the MPANI support for an Infrastructure Commission mainly because:
- Infrastructure planning is too short-term.
- Its process led rather than intelligence led.
- Not enough priority and investmentis given to maintaining the existing infrastructure assets we have.
- Maintenance of our Infrastructure is delivered through one-year budgets, which is not conducive to delivering effective planning, quality and value for money.
- Infrastructure planning in NI is segmented and viewed on a Departmental basis. In 2016 the Organisation for Economic Co-operation and Development(OECD) highlighted the need to clarify roles and responsibilities of key stakeholders and, as a result, eliminate duplication in administrative functions and institutional frameworks.
- Too many projects suffer time delaysand /or cost overruns when compared against original timescales andbudgets mainly because of funding constraints, legal challenges, planning issues, quality of construction, andlack of interest from Industry.
- Political uncertainty has held back significant levels of private sector investment in infrastructure.
MPANI believe there is an urgent need to consider how alternative models, resourced with sufficient, highly skilled staff might improve future infrastructure delivery, given the importance of major capital infrastructure. MAPNI have stated in previous consultations and submissions to NI Assembly Committees that the NI Executive should move towards models in Scotland and the Republic of Ireland by creating a new centralised procurement and delivery agency to develop and deliver infrastructure. The Northern Ireland Audit Office (NIAO) in its Major Capital Projects Report in 2019 said this new body should taking responsibility for education and health capital building projects and seek to drive efficiencies in delivery costs. We, and other NICG colleagues, firmly believe that any newly appointed Infrastructure Commission must lie under the responsibility of the NI Executive as Infrastructure is cross departmental covering roads, water, energy, digital communications, waste, housing health and education. The Advisory Panel took evidence and submissions from a wide range of stakeholders and given their tight timescale they are due to report back to the Infrastructure Minister by the 29th September. We await their recommendations and the Ministers advice to the NI Executive.
Health & Safety
On the Health and Safety front MPANI are continuing to advise and inform Members about the dangers of complacency and the need to continually remind everyone of social distancing, washing hands and good practice in all areas of activity. At the recent All Party Group on Construction the HSENI Chief Executive, Robert Kidd, paid tribute to the Construction Industry and the Mineral Products Industry for the way both sectors have
dealt with the COVID 19 emergency. The publication in August of the public register of all sites and businesses registered for aggregates levy has been widely supported and welcomed across the Industry both here in NI and across the UK. We have produced an NI specific list and circulated it around the Industry here. A number of operating quarries and businesses are not registered and MPANI have reported our concerns to HMRC in the usual way.