In mid-January, the CEF published its latest State of Trade survey, which acts as a key barometer of the sector’s performance in Northern Ireland and beyond.
The survey (for second half of 2021) represented responses from companies with a combined turnover of over £1 billion per annum and had the following key findings:
• On material shortages: 11% said it was having a critical impact on the future sustainability of their business; 47% said it was having a serious impact causing delays in project delivery/commencement; 36% said it was having a moderate impact.
• On rising costs: 27% said the impact was critical leading to a risk to their business; 46% said it was having a serious impact causing financial concern; 23% said impact was moderate.
• Of those who have engaged with government on the Executive’s Procurement Advisory Note (PAN) on material shortages and costs increases published last August: 42% said government clients have still not engaged on potential claims; 38% said clients had only properly engaged after detailed CPD guidance was published in November; only 20% reported good engagement.
• Main reason for delay in settling claims under the PAN: 32% of respondents said government clients had said lack of budget; 29% said lack of detailed guidance; 21% said their clients had said that contractors didn’t need supported; 18% said clients were unsure if the PAN applied to them.
• On inclusion of inflationary clauses in future government contracts where they had previously not existed: 50% said inclusion was essential for tendering; 29% said more likely to tender if included.
• On business prospects for the 12 months ahead: 40% of respondents said stabilising output/consolidating their business; 25% said growth; 21% said increase profitability; 13% said survive.
REVIEW OF 2011 PLANNING ACT
The Department for Infrastructure has published its Review Reportinto the 2011 Planning Act. CEF made a detailed submission to the Review last spring and – given the significant interest from its membership in the review – CEF has welcomed the publication of the report by the Minister and the Department. The review report, and the next steps that are laid out, will enable changes to the existing legislation with the intent of making our planning system better. CEF welcomes that, and looks forward to advancing its views throughout this process.
MATERIALS SHORTAGES AND PRICE INCREASES
With the State of Trade survey results continuing to reflect the challenges that the sector faces, it is welcome that the Procurement Advisory Note agreed by the NI Executive last August on the subject continues to be in place for existing contracts. The PAN has, however, been withdrawn for new tenders as of 1st January. This though has been offset by the welcome mandatory inclusion of the appropriate inflationary NEC4 clause, X1, in all new public sector tenders from that date.
